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Plans:Wholesale trade is one component of business sales and inventories. Only those firms which sell to governments, institutions and other businesses are considered part of wholesale trade. Wholesale-trade data gives investors a closer look at the consumer economy, as sales and inventory numbers can be a leading indicator of consumer trends.
Because manufacturing is such a large part of GDP, the wholesale-trade data can be a valuable tool for keeping a finger on the pulse of the economy.Equity markets are positively affected by an increase in production, as corporate profits increase. The bond markets, on the other hand, prefer moderate growth so as to stem inflation. Economic indicators are some of the most valuable tools investors can place in their arsenals.
The wealth effect is a psychological phenomenon that causes people to spend more as the value of their assets rises. The premise is that when consumers’ homes or investment portfolios increase in value, they feel more financially secure, so they increase their spending. Conversely, when consumers see the value of their homes or portfolios fall, they tend to spend less. The wealth effect attempts to explain why consumers might change their spending habits even if their income and fixed costs have stayed the same.
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Thread: optioncompany - optcom.biz
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