The stock market and the economy
It would be rational to think that there is a relationship between the economy and the stock market. If the economy is performing well, then it could be assumed that economic growth would enhance the profitability of a company and hence improve their stock price. In a recession, companies can encounter lower profits. This may mean reduced dividends for stockholders and a falling share price. There have been numerous studies on this argument. Stock prices change rapidly and can be …