Impact of foreign markets

N

Nebeno

What is the impact of movements in foreign markets on US markets? Do markets in in say Europe, or China, or Japan have an affect on these markets? Or does the US market have an impact on other markets? Any foreign markets that have a larger affect, and are there markets that are more moved (bonds, futures, stocks)? And, of course, is it something that can be useful in daytrading? An idea of the general day trend perhaps? This is something I have been interested in, how things have a global impact, the flow of money (I've read about George Soros), but haven't seen much information about them, if anyone has any thoughts or resources on the subject i'd much appreciate it.

Thanks,
Ben
 
I would say that the US markets lead everything else. Pull up a chart of the Nasdaq or the Dow and compare it to the UK FTSE100 or the German DAX and you will see similarities bearing in mind the US markets don't get going till 2:30 UK time. Before this time the UK and European markets are digesting the previous close of the US markets.

There are, of course, divergences from this but the above is the norm
 
Academics has studies in the past. If you find those papers, you will see terms like meteorshower and heatwave (they meant impacts from one financial market to another).
 
The Japanese and the German markets can sometimes move the US markets. Not very often but it happens. Especially when big news come from Japan & Europe. The UK markets is not important any more. UK is more and more isolated in the economy and politics of EU. The heart and engine of Europe is Germany and France. Germany is 1/3 of the total market of the EU now. If Germany is doing well Europe is doing well. The same is true for Japan and Asia.

Mark Davis
 
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