Unformatted text preview: odities Durable goods industries
Durable goods industries Auto, personal computer, appliances, small equipment
Because the stock market looks ahead six months to a year, a perceived recovery bodes well for durable goods.
Most consumers postpone the purchase of large ticket items during a recession and pent up demand makes those industries attractive to investors. Capital goods industries
Capital goods industries Airplane industry, large machines and equipment As the economy recovers and businesses begin to notice an increase in sales, they begin to make capital investments to expand product lines, run more efficiently, keep costs down and increase capacity to meet the expected increased demand. Financial Industry
Financial Industry To combat recessionary periods the Federal Reserve expands the money supply to lower interest rates and encourage consumer and business borrowing. Investors perceive the recession is coming to an end expecting bank incomes to rise as loan demand recovers. Therefore banks and financial company stocks become attractive investments and financial stock prices e...
View Full Document
This document was uploaded on 02/05/2014.
- Fall '14