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The money market and the capital market are not single institutions but two broad components of the global financial system.The money market is the trade in short-term debt. It is a constant flow of cash between governments, corporations, banks, and financial institutions, borrowing and lending for a term as short as overnight and no longer than a year.The capital market encompasses the trade in both stocks and bonds. These are long-term assets bought by financial institutions, professional brokers, and individual investorsTogether, the money market and the capital market comprise a large portion of what is known as the financial marketThe Money MarketThe money market is a good place for individuals, banks, other companies, and governments to park cash for a short period of time, usually o

A cyclical stock is a stock that's price is affected by macroeconomic or systematic changes in the overall economy. Cyclical stocks are known for following the cycles of an economy through expansion, peak, recession, and recovery. Most cyclical stocks involve companies that sell consumer discretionary items that consumers buy more during a booming economy but spend less on during a recession.KEY TAKEAWAYSCyclical stocks are affected by macroeconomic changes, where its returns follow the cycles of an economy.Cyclical stocks are generally the opposite of defensive stocks. Cyclical stocks include discretionary companies, such as Starbucks or Nike, while defensive stocks are staples, such as Campbell Soup.Cyclical stocks usually have higher volatility and are expected to pr

Floating stock is the number of shares available for trading of a particular stock. Low float stocks are those with a low number of shares. Floating stock is calculated by subtracting closely-held shares and restricted stock from a firm’s total outstanding shares.Closely-held shares are those owned by insiders, major shareholders, and employees. Restricted stock refers to insider shares that cannot be traded because of a temporary restriction, such as the lock-up period after an initial public offering (IPO).A stock with a small float will generally be more volatile than a stock with a large float. This is because, with fewer shares available, it may be harder to find a buyer or seller. This results in larger spreads and often lower volume.KEY TAKEAWAYSFloatin

The secured overnight financing rate (SOFR) is a benchmark interest rate for dollar-denominated derivatives and loans that is replacing the London interbank offered rate (LIBOR). Interest rate swaps on more than $80 trillion in notional debt switched to the SOFR in October 2020. This transition is expected to increase long-term liquidity but also result in substantial short-term trading volatility in derivatives.KEY TAKEAWAYSThe secured overnight financing rate (SOFR) is a benchmark interest rate for dollar-denominated derivatives and loans that is replacing the London interbank offered rate (LIBOR).SOFR is based on transactions in the Treasury repurchase market and is seen as preferable to LIBOR since it is based on data from observable transactions rather than on esti

Nonfarm payrolls is the measure of the number of workers in the U.S. excluding farm workers and workers in a handful of other job classifications. This is measured by the Bureau of Labor Statistics (BLS), which surveys private and government entities throughout the U.S. about their payrolls. The BLS reports the nonfarm payroll numbers to the public on a monthly basis through the closely followed “Employment Situation” report.In addition to farm workers, nonfarm payrolls data also excludes some government workers, private households, proprietors, and non-profit employeesUnderstanding Nonfarm PayrollsWhile the name nonfarm payrolls insinuates that farm workers be excluded from the statistic, there are also several other categories that the BLS does not count when compiling nonfarm

A bull market is the condition of a financial market in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.Because prices of securities rise and fall essentially continuously during trading, the term "bull market" is typically reserved for extended periods in which a large portion of security prices are rising. Bull markets tend to last for months or even years.KEY TAKEAWAYSA bull market is a period of time in financial markets when the price of an asset or security rises continuously.The commonly accepted definition of a bull market is when stock prices rise by 20% after two declines of 20% each.Trad

China Concept Stocks  is a set of stock of companies whose assets or earnings have significant activities in mainland China. The People's Republic of China is undergoing major financial transformation, and many leading mainland-based companies have chosen to list themselves overseas to gain access to foreign investor capital. Currently, there are China Concepts Stocks listed on several major stock exchanges around the globe, including the Hong Kong Stock Exchange (HKEx), Singapore Exchange (SGX), New York Stock Exchange (NYSE), NASDAQ, NYSE MKT (formerly known as the American Stock Exchange), London Stock Exchange (LSE), Euronext, and the Tokyo Stock Exchange (TSE).

Balance of trade (BOT) is the difference between the value of a country's exports and the value of a country's imports for a given period. Balance of trade is the largest component of a country's balance of payments (BOP). Sometimes the balance of trade between a country's goods and the balance of trade between its services are distinguished as two separate figures.The balance of trade is also referred to as the trade balance, the international trade balance, commercial balance, or the net exports.KEY TAKEAWAYSBalance of trade (BOT) is the difference between the value of a country's imports and exports for a given period and is the largest component of a country's balance of payments (BOP).A country that imports more goods and services than it export

The producer price index (PPI), published by the Bureau of Labor Statistics (BLS), is a group of indexes that calculates and represents the average movement in selling prices from domestic production over time.It is a measure of inflation based on input costs to producers.KEY TAKEAWAYSThe PPI is different from the CPI in that it measures costs from the viewpoint of industries that make the products, whereas the CPI measures prices from the perspective of consumers.The BLS separates PPI data into three main areas of classification: industry, commodity, and commodity-based final and intermediate demand (FD-ID).1The PPI is considered an objective tool for adjusting prices in long-term purchasing agreements.Understanding the Producer Price Index (PPI)The PPI measures&n

Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health.KEY TAKEAWAYSGross domestic product (GDP) is the monetary value of all finished goods and services made within a country during a specific period.GDP provides an economic snapshot of a country, used to estimate the size of an economy and growth rate.GDP can be calculated in three ways, using expenditures, production, or incomes. It can be adjusted for inflation and population to provide deeper insights.Though it has limitations, GDP is a key tool to guide policy-makers, investors, and businesses