On May 18th the S&P 500 was at 2129.3 my forecast for June 15th was 2178. The actual price was 2084.4. There are many factors that can affect this price. The factors that might have had the greatest impact to the drop in price is a combination of low inflation, and low GDP growth in the first quarter. When inflation is at a low rate, the stock market responds with a surge in selling. High inflation causes investors to think that companies may hold back on spending; this causes an across the board decrease in revenue and the higher cost of goods coupled with the drop in revenue causes the stock market to drop. The U.S growth in the first quarter showed negative growth due to extreme weather. This has a direct effect to the U.S stock price giving it a weaker value to investors causing them to react to the information and lowering the …show more content…
The actual was 2.35. I did not have any economic data supporting my guess. Nonetheless, the rate that treasury bonds increase is based on the demand, and the yield as an opposite effect. Since interest rates and inflation are low. The demands for Treasury notes are low, increasing the yield for 10 year treasury notes. The reason why the demand is low for these notes is because of the anticipation of increase interest rates from the Federal Reserve. For investors this reason is why they are waiting for interest rates to raise because then the return on investment will be