What to expect for the stock markets in a recession | markets shares

share

Security representing a share in the capital of a public company. It guarantees the owner membership rights (voting rights and voting rights at the general meeting) and property rights (right to share in the profits, share in capital increases or in the liquidation result).

All articles for this technical term

stock index

Measures the development of a stock market. Includes a portfolio of selected equities from a country, region or industry whose prices, taking into account certain calculation criteria, result in the respective, continuously calculated index level.

All articles for this technical term

unemployment rate

Percentage of unemployed who are willing to work, measured as the ratio between the unemployed and the labor force.

All articles for this technical term

GDP

added value of an economy. The development in GDP is an important factor that affects companies’ profits and interest rates, and thus indirectly for equities and bonds.

All articles for this technical term

BIS

Organization founded in 1930 with headquarters in Basel. BIS encourages cooperation between central banks (including SNBs), which are also shareholders in BIS. Within this framework, Basel II was developed.

All articles for this technical term

Bank for International Payments

Organization founded in 1930 with headquarters in Basel. BIS encourages cooperation between central banks (including SNBs), which are also shareholders in BIS. Within this framework, Basel II was developed.

All articles for this technical term

balance

Periodic comparison of all assets and liabilities on a key date. The assets side provides information on the use of the funds, while the liabilities side provides information on the provision of the funds (financing). part of the annual report.

All articles for this technical term

gross domestic product

added value of an economy. The development in GDP is an important factor that affects companies’ profits and interest rates, and thus indirectly for equities and bonds.

All articles for this technical term

stock Exchange

Regular market organized according to fixed customs. Depending on the goods traded, one speaks z. B. from securities, securities, foreign exchange, commodity exchanges or futures exchanges.

All articles for this technical term

fed

The US Federal Reserve, to which the twelve Federal Reserve Banks are affiliated. At the top is the Governing Board (Washington) in Washington, which also provides the majority in the Open Market Committee, where monetary policy is decided.

All articles for this technical term

monetary policy

Objectives by which central banks control interest rates in the money market (key interest rates) and thus the money supply in a country or currency area. Most central banks, including the Swiss National Bank, aim to keep prices stable (see inflation, deflation) and allow the economy to grow (see quantitative easing).

All articles for this technical term

inflation

Price increase or currency depreciation. The change is indicated as the inflation rate. Often causes central banks to pursue a restrictive monetary policy (high key interest rates), which weighs on stocks and bonds. Opposite: disinflation, deflation.

All articles for this technical term

insolvency

Occurs when a debtor fails to pay interest and installments on time and in full. According to the practice of rating agencies, a payment delay of more than thirty days is considered a default. However, the default does not necessarily mean that the creditor loses all the capital because a bankruptcy dividend is normally distributed during the bankruptcy proceedings. In the case of credit derivatives, the default is considered a credit event. According to the rating agencies, bond rescheduling (interchangeable) also counts as default.

All articles for this technical term

Economy

Often used synonymously with the state of the economy as a whole. Research emphasizes the economic course of economic growth (upswing, boom, downturn, recession, depression). Therefore, the term business cycle is also used in English.

All articles for this technical term

consumer sentiment

Study on the development of private households’ income and consumption behavior. Not a leading indicator because consumer consumption takes a long time to come up in an economic recovery.

All articles for this technical term

price-earnings ratio

Share price in relation to earned or expected earnings per. dividend-bearing share. The share valuation ratio indicates how many times the earnings per share is included in the share price. P / E can be used to compare different stocks within an industry.

All articles for this technical term

key interest rates

Central bank interest rates to control the money supply with a signal effect on monetary policy, known as the Federal Funds Target Rate in the United States. The Swiss National Bank uses a target range for the three-month Libor rate.

All articles for this technical term

liquidity

1. A company’s ability to meet payment obligations on time. Common liquidity indicators are the liquidity ratio, which in percentage terms expresses how much of the short-term debt is covered by cash and cash equivalents, the quick ratio, which shows how much of the short-term debt is covered by cash and cash equivalents and receivables, and current ratios. The latter sets all current assets in relation to short-term borrowed capital. 2. High marketability of a security, which is based on the large number of securities in circulation and a narrow bid-offer spread.

All articles for this technical term

Central Bank

Economic institution responsible for providing the economy with money. At the same time, it should create monetary stability and, depending on the Statute, full employment and appropriate economic growth. In Switzerland, this is the SNB.

All articles for this technical term

real interest rates

Nominal interest rate minus expected inflation. The real interest rate thus expresses the interest income or the adjusted interest debt adjusted for purchasing power losses.

All articles for this technical term

Research

Systematic safety assessment as a basis for investment policy. It is divided into fundamental analysis and technical analysis.

All articles for this technical term

risk

In financial market theory, the risk of an investment is measured by the fluctuations in earnings. Theoretically, risk and return are directly related: The higher the risk taken, the greater the return on the corresponding investment must be in the long term (cf. risk management).

All articles for this technical term

government bond

Bond issued by a government to meet its domestic or foreign financing needs. Government bond yields serve as a benchmark for other issuers in the same country. Unlike other countries, Switzerland does not issue any confederation bonds abroad.

All articles for this technical term

variance

Investment or portfolio risk. The variance is calculated on the basis of the deviation of the individual returns from the average return in a given period. A high variance means a high risk. square of the standard deviation.

All articles for this technical term

Central Bank

Economic institution responsible for providing the economy with money. At the same time, it should create monetary stability and, depending on the Statute, full employment and appropriate economic growth. In Switzerland, this is the SNB.

All articles for this technical term

yield curve

Shows the current return (return to maturity) of interest-bearing investments with different maturities and the same quality. Because market expectations are embedded in current interest rates, the yield curve reflects a consensus investor forecast. Examples are the Confederation yield curve and the swap yield curve.

All articles for this technical term

Leave a Comment