Changes in international stock markets and how they affect business and economy

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Changes in international stock markets and how they affect business and economy Students name Institutional affiliation A stock market is a market platform in which financial securities are displayed and traded either through exchanges or over the counter markets by the forces of demand and supply (Ṣabrī, 2007). It's one of the key compositions of an open market economy as it provides companies with access to capital with a condition that investors get ownership in the company. The stock markets both in develop and developing countries enable investors across the globe to invest in firms. Stock investing is considered by a majority of people because stocks have outpaced other type of financial instruments regarding returns over a specific duration (Gaspar et al., 23). To support this statement, take for example Chinese stock market which has provided 70% returns on stock investments. There are financial times in which stock prices fall hence resulting in large fiscal losses to investors and also to the respective firms. Movements in the international stock markets can have an extensive economic impact on the global economy. A collapse in the stock price will reduce U.S economic wealth since the stock market reveals how well a company performs. It also makes it easier for to get accessed to a performing company (Ṣabrī, 2007). A fall in stock price will discourage investors from injecting capital into the U.S companies hence companies won’t be having money to pay pensions plans and also enough money to pay for their employee. This can lead to a portion of their employees losing their jobs. Eventually, America will go under great recession. In addition to

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