Question: This is about US stock market. The stock market is reactive to macroec

Question

Question: This is about US stock market. The stock market is reactive to macroeconomic and geopolitical events or conditions– events/conditions that impact the national, or even the global economy (not events that impact only one or more of your companies such as the retirement of a key executive). To answer this one, you will need to develop a sense of macroeconomic events/conditions that impacted the market during the entire duration of the simulation. Your goal in answering this question is to pick and explain the macroeconomic/geopolitical event that you believe most impacted the stock market – on what were investors most focused? Be sure to explain how this event impacted the stock market.

Please do this based uppon a situation that has happend within the past 5 months. Thank you !! :)

Explanation / Answer

One of the recent geo-political events of importance was the testing of its most powerful nuclear bomb by North Korea. The immediate impact of this was seen in the stock market. The stock market plunged and investors took out their money or investments from equity. Instead, they shifted their money to safe investments like gold. Another change that was observed was that the investors who had diversified their portfolio across various stock markets had taken out their money from Asian equity markets.

Such kind of incidents sends a shock among the global investors and they prefer to take out their money from comparatively risky investments like equity and invest it to safe investments like gold, fixed deposits etc. This is represented by a fall in the stock market and a rise in gold prices. Thus, the tension between US and North Korea has affected the stock market.

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