In theory, the commodity market shocks the stock market through affecting the performance of listed companies and the plate linkage, while the stock market influences the commodity market by reflecting the macroeconomic expectations. At the same time, the cross-market flow of funds leads to a competitive and alternative relationship between the two markets. In this point of view, the relationship between the two markets exists uncertainty and complicacy.
The impact of the commodity market on the stock market is mainly reflected in two aspects. First, the fluctuation of commodity prices can lead to changes in the corresponding stock prices. For example, when a commodity price increases, the enterprise in upstream of the commodity supply chain …show more content…
As an economic barometer, the change in stock market prices is a manifestation of market participants' expectations of the future economy. While commodity prices are often closely linked to economic performance: In the economic prosperity, the real industry demand increases, the market liquidity is abundant, and the prices of production and investment commodities rise; in the economic downturn, the real industry demand decreases, and the price of gold and other commodities with hedging function declines. It can be seen that the stock market indirectly affects the commodity market by reflecting the macroeconomic …show more content…
The spot is a physical commodity that can be used for shipment, storage and manufacturing, and can be designed as a standard futures contract to trade. The original intention of setting up a futures market is to find and avoid risks, but the market can also become a paradise for financial speculators. Due to cross-market transactions, futures prices can be affected by the stock market; through inventory and information channels, futures prices can affect the spot pricing, thus passing the impact of the stock market to the spot market. In recent years, many countries, represented by the United States, have relaxed regulation of the commodity futures market. A large number of financial investors enter the commodity market and carry out cross-market trading between the commodity market and the stock market. The flow of funds between the commodity futures market and the stock market leads to fluctuations in the stock market affecting commodity futures pricing. Specifically, when the economy is good or there is other good news, investors will invest in the stock market and increase the investment in the futures market accordingly. Holding a certain percentage of stocks and futures is often an investment strategy of the professional investor. Funds flow into the two markets at the same time, leading to the guidance of the stock market yields on commodity futures yields. When
The impact of the commodity market on the stock market is mainly reflected in two aspects. First, the fluctuation of commodity prices can lead to changes in the corresponding stock prices. For example, when a commodity price increases, the enterprise in upstream of the commodity supply chain …show more content…
As an economic barometer, the change in stock market prices is a manifestation of market participants' expectations of the future economy. While commodity prices are often closely linked to economic performance: In the economic prosperity, the real industry demand increases, the market liquidity is abundant, and the prices of production and investment commodities rise; in the economic downturn, the real industry demand decreases, and the price of gold and other commodities with hedging function declines. It can be seen that the stock market indirectly affects the commodity market by reflecting the macroeconomic …show more content…
The spot is a physical commodity that can be used for shipment, storage and manufacturing, and can be designed as a standard futures contract to trade. The original intention of setting up a futures market is to find and avoid risks, but the market can also become a paradise for financial speculators. Due to cross-market transactions, futures prices can be affected by the stock market; through inventory and information channels, futures prices can affect the spot pricing, thus passing the impact of the stock market to the spot market. In recent years, many countries, represented by the United States, have relaxed regulation of the commodity futures market. A large number of financial investors enter the commodity market and carry out cross-market trading between the commodity market and the stock market. The flow of funds between the commodity futures market and the stock market leads to fluctuations in the stock market affecting commodity futures pricing. Specifically, when the economy is good or there is other good news, investors will invest in the stock market and increase the investment in the futures market accordingly. Holding a certain percentage of stocks and futures is often an investment strategy of the professional investor. Funds flow into the two markets at the same time, leading to the guidance of the stock market yields on commodity futures yields. When