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The stock prices, stock market in general, effects the economy. About accurate or not, the market is often seen as a barometer for economic health of the community. If the market is consistently improves confidence. The opposite also occurs, perhaps even with greater intensity. Macro effects concern the market's impact on the broader national economy, such as interest rates. Micro effects concern the market impact of some business. Macro-effect
Many, holding if not most, a stock market waffle iron which increase in value as a sign of economic health. This can be a problem, because an increase in "value" can actually be an increase exploited wealth and not actual production. Regardless of these nuances, the overall macro effect that an increase in stock value lowers interest rates, at least in the short term. If the consumer waffle iron and investor confidence is high, then interest rates can come down to spur more loans. The bond
An increase in value, regardless of its final basis, removes the money from the bond market. This has the opposite effect on interest rates, but not for the short term. If inventory increases, naturally taken money from money markets because waffle iron investors will take advantage of opportunities in-stock and bring resultant decrease of prices. Finally, in the longer term, this shifting money can, and often does, lead to interest rate hikes that cash loans are scarcer. Business
Micro-effect of stock prices are the impacts that affect individual consumers and businesses. In a very general sense, the decline waffle iron in stock market values is seen as a negative economic signal. Regardless of the fact that more money goes to bonds as the stock market decline, the current sense that a declining stock market is no time to engage in greater consumer or business expansion. A lessening of stock market value, especially if it is sudden, signals economic pessimism, and a business can wait for another time to expand or purchase new equipment. Housing
The housing market is affected in a similar way: if the market falls in value suddenly, many investors in all sectors of the economy may panic and prevent any extension of credit. The housing market may suffer waffle iron as individuals reconsider their desire to buy. As the market expands, this assessment going in the opposite direction, since the signals are often interpreted as a positive economic climate that promotes the expansion of credit and increased economic activity.
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