joe asked in Business & FinanceInvesting · 8 years ago

who controls the stock market?

money flow

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  • Jonah
    Lv 4
    8 years ago
    Favorite Answer

    The exchanges like NYSE and Nasdaq are private companies. They control whether a company gets on the exchange and enforces trading rules. Of course, the government (SEC) control a lot of what goes on through rules. So, the main drivers are the private exchanges and government.

    The Market is controlled by large institutions that control about 80% of the money supply in stocks. These are typically the large hedge funds and brokerage companies like Fidelity and Merrill Lynch.

    There are larger forces at play. There are international leaders that control global markets by tightening up credit, buying up companies, and then allowing credit to expand. These people are hard to pin down, but there is a lot of evidence that market cycles are controlled by world leaders.

    One of the rule about investing is that small investors are always wrong and it is typically true. So, the PEOPLE are not the ones controlling anything.

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  • 8 years ago

    It's not so much "who" as "what".

    If you look at the market's ups and downs, you'll find they follow a couple of trends.

    1. Analysts' predictions. "Analysts" make predictions about how each publicly traded company should do each quarter, about what their sales and earnings should be at the end of the quarter. If a company beats these predictions and does better than expected, people buy its stock and the stock increases in value. If a company's sales and earnings are the same as the prediction, its stock might or might not be bought or sold depending on financial pundits' ideas about the company's future potential. If a company's sales and earnings don't meet analysts' predictions, stockholders sell the stock and its value drops. As you can see, there's no relationship between the value of a company's stock and the true value of the company. I've never been able to figure out how analysts got so much power ...or who they are. (Everyone always just says something like "Sears did not meet analysts' predictions for the 3rd quarter" without saying who the analysts are.) It all seems really strange, like witches looking into crystal balls.

    2. Rumors. There's a lot of emotional buying and selling in the markets. If a political or financial rumor spreads, the shareholders react to it. If the Fed might lower the interest rates or might raise the interest rates..... If Congress is going to suspend a regulation or make new regulations..... If the President is going to China ...... If Kraft Foods might buy a Russian wheat growing farm.... Once again this seems like a really strange way for something that's the foundation of our economy to operate. It's not logical and it's completely irrational.

    3. "Seasons". The markets are usually down at the end of Winter in March and up again by Spring and Summer. Most production orders and most retail activity occurs for and during the holiday season and during the time of the year when America is busy with things like home maintenance and construction. Government contracts can be let at any time but when the "winner" of a bidding war is finally announced, that company's stock will go up. I guess you could call this "government contract season".:-)

    Source(s): Used to "dabble" in the stock market but went to safer investments.
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  • Anonymous
    8 years ago

    Every country want to control on every business they make a body for control on stock market in India SEBI control the stock market.

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  • Anonymous
    8 years ago

    That is a great question!

    The Controllers are:

    1. Economic News: Business Cycles, Interest rates, etc

    2. Groups of Large Traders (Large cap, mid cap)

    3. Most importantly: The fundamentals of a company such as: earnings, etc

    4. Insiders (CEOs, Employee shareholders, etc)

    The list could go on. I hope this helps!

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  • 8 years ago

    Computers through program trading.

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  • 8 years ago

    70% is control by instytutions like

    Goldman saks city bank mutual founds etc , 30% by individual investors .

    Source(s): Books , expirience .
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