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Chapter 116: The Impact of the Midterm Elections


S&P 500.Dow.NASDAQ.These three indices are the barometer of the U.S. stock market.This is because the U.S. stock market is the largest stock market in the world.The three of them can be seen as the three barometers of the world's stock market in a sense.Whenever the U.S. stock market is bearish.They plummeted, and the red ones couldn't be red again.Like the financial crisis of '08 and '09.And whenever U.S. stocks are in a bull market, they can't be greener anymore.Like 2010 to this year.Although there are occasional red accents.However, the overall form is still more green.This is the stock market for nearly a decade.Except for a few small twists and turns in the middle.It's basically up.It is this upward trend.That's why there is the possibility that Apple or Amazon will become the first super-huge company with a market capitalization of more than a trillion dollars.Only if the whole market is good.That's why companies with such exaggerated market capitalizations have emerged.Abel sees that all three major indices of U.S. stocks are on the green side.And the value of red is not low.S&P 500: 2885.12, -0.8%.Dow Jones: 26447.05, -0.68%.NASDAQ: 7788.45, -1.16%.All three indices are in a downward trend.The drop is not too big.This caught Abel's attention.Because of the smoke of fate.He also occasionally pays attention to the U.S. stock market.As the largest stock market by market capitalization, it is also the most free.It's one of the best hunting grounds for a guy like him who has this plug-in to predict future clips.It's just the time before.He focused on prophesies of some star stocks.The so-called star stocks are those stocks that have risen the highest in a day.Or predict the stocks that will fall hardest.It's just that when the overall market is flat.It doesn't matter if it's the star stocks that have risen the most.Or the more unlucky, the stocks that fell the most.The magnitude of the rise and the magnitude of the decline are not exaggerated.A few percent of the way to death.And most of the plates of such stocks are relatively small.Even if Abel invests money, the profit is very small.Companies with larger plates, such as Apple, Google, Amazon, and Microsoft, are not stable.The size of the stock plate has a great impact on speculative stocks.For example, Apple's stock rises and falls by 1%, which is a fluctuation of billions to tens of billions.But if you change it to a company with a market value of only a few hundred million dollars.This 1% range is only a few million to tens of millions of dollars.Such a small amount of floating.It makes sense for some retail investors.But for a crocodile like Abel, who has more than a dozen or 2 billion cash flow in his hands.This kind of company is just small shrimp that doesn't taste good.Look at the three major indices in a patch of red.Abel used his mouse curiously and clicked on the U.S. line of these three major indices in recent times.On the Southeast Asian and Asian side, this kind of circuit chart is called a candlestick chart.At first, it was made by the rice merchants of the Wako country to symbolize the daily fluctuation of rice prices.Later, it gradually developed into a fluctuation chart of the fluctuations of the stock market over there.With the development of the Japanese economy and stock market in the middle of the 20th century, K-line charts swept Southeast Asia, affecting the whole of Asia, and there is a trend of becoming popular all over the world.However, Lao Mei is very stubborn and still uses the "American line", also known as the zigzag line.The two are actually one thing.In fact, in comparison, the K-line chart is actually more intuitive than the U.S. line, and it can better reflect the power contrast between bulls and bears.But Lao Mei can't help it.Abel hadn't studied the stock market before.Half of the existing stock knowledge learned about the original Abel's memory fragments.Half of it is self-study after crossing over.Today is October 5th, 2018.Abel flipped through the three major indices.An interesting phenomenon was discovered.This interesting phenomenon is:These three major indices have fallen for three consecutive days since October 3.Although the decline in the first two days was negligible.But today it fell to this scale.It can't be said to be negligible.Because if you convert them to the entire U.S. stock market.That's a few tenths or a 1% drop.is that the market value of tens of billions of dollars in the entire market has disappeared.This level of decline.On this graph, it has been rare in recent years.Occasionally, there are some drops, but they usually grow back on the same day or the next day.Even if it falls for two days in a row.It will also rise back on the third day.It's rare to see three days in a row like now, and one time by a larger margin.Since the financial crisis of '08 and '09, it has not been very common."

Three red lines......

Three days in a row.Was it a coincidence, or did something happen?

”Look at the three major indices.Abel looked up some recent events that could affect the stock market.Check it out.There are two major events that are most likely to be influential and can affect the U.S. stock market.The first is international.It has a great influence on the whole world.That was the sweater war that lasted for several months and caused a lot of uproar.The sweater war was spearheaded by the federal government led by the current president of the United States, Mr.

Unreliable.It's just that this Mr.

President, I didn't expect that there would dare to fight.Now there is a stalemate for the time being.There are mutual wins and losses, and China has suffered some losses overall, but the United States has not suffered without losses.Except for the sweater fight.The other is the domestic factor in the United States.And it is clear that this factor has a much greater impact on the US stock market than the sweater war.This event is the midterm elections for Congress.Midterm elections for the Federation.According to the Federal Constitution, presidential elections are held every four years and congressional elections are held every two years.One of the congressional elections is held at the same time as the quadrennial presidential election, while the other is held between presidential terms.The congressional elections held between presidential terms are called "midterm elections."

This year is the year of the midterm elections.The Donkey Party and the Elephant Party will decide the winner within this month.The impact of this election is significant.It is likely that the president will be decided in two years' time.In the 2014 midterm elections, the Elephant Party won a resounding victory.And then in the quadrennial presidential elections in 2016.Push up the incumbent president of the elephant party, who is not favored by everyone.The midterm elections will not be concluded until about a month away.But its effects are already starting now.Because of the uncertainty of the election situation.The market has also become uncertain.In the midst of this uncertainty.Investors are worried about market movements.Then it triggered the fall of the three major indices.Even without the fate smoke prediction.Abel also felt before the results of this midterm election.The entire U.S. stock market is going to be interesting.