Bellwether Stock

AAA

DEFINITION of 'Bellwether Stock'

A stock that is believed to be a leading indicator of the direction of a sector, industry or market as a whole. Bellwether stocks are often used to determine the direction in which an industry or market is headed in the short term.

INVESTOPEDIA EXPLAINS 'Bellwether Stock'

Bellwether stocks are typically large-cap equities that when performing well signal a bullish market but when performing poorly may signal a bearish market. Many different stocks may be classified as bellwethers; however, shipping and rail stocks have historically been particularly good bellwethers for the U.S. economy.

RELATED TERMS
  1. Indicator

    Indicators are statistics used to measure current conditions ...
  2. Common Stock Equivalent

    Securities such as stock options, warrants, preferred bonds, ...
  3. Champagne Stock

    A slang term used to describe a stock that has appreciated dramatically. ...
  4. Barometer

    A compilation of market and economic data that represents a general ...
  5. Investment

    An asset or item that is purchased with the hope that it will ...
  6. Bellwether

    An event or indicator that shows the possible presence of a trend. ...
RELATED FAQS
  1. Why would a company issue a rights offering?

    Companies most commonly issue a rights offering to raise additional capital. A company may need extra capital to meet its ... Read Full Answer >>
  2. When does a primary market become a secondary market?

    The difference between the primary and secondary markets is a simple matter of issue versus resale. While both marketplaces ... Read Full Answer >>
  3. What are the benefits and shortfalls of the Herfindahl-Hirschman Index?

    Equity and debt are the two sources of financing accessible in capital markets. The term "capital structure" refers to the ... Read Full Answer >>
  4. What sectors are best for an investor seeking a high annual return?

    A company receives a share premium whenever it receives money in excess of the face value (par value) of its shares. Corporations ... Read Full Answer >>
  5. What business risks ultimately caused Enron's collapse?

    The Internal Revenue Service (IRS) requires that a company lists its share premium – otherwise known as the capital surplus ... Read Full Answer >>
  6. How does monetary policy influence the Fisher effect?

    One of the chief benefits of funding business operations with paid-up capital is that it does not need to be repaid. Also ... Read Full Answer >>
Related Articles
  1. Active Trading

    Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.
  2. Options & Futures

    How To Read The Market's Psychological State

    Discover what on-balance volume, accumulation/distribution and open interest can tell you about the market mood.
  3. Active Trading Fundamentals

    Leading Indicators Of Behavioral Finance

    Discover how put-call ratios and moving averages can be used to analyze investor behavior.
  4. Investing

    Which Dow Jones Stocks are Safe? Which are Risky?

    In a situation where our sustained bull run could turn into a sell-off rather quickly, here are four somewhat safe Dow stocks and four to be wary of.
  5. Investing

    Apple or Google: Which is the Better Bet?

    Apple and Google have made many investors rich since the turn of the century. Which is more appealing going forward?
  6. Fundamental Analysis

    Invest in Cancer Research with These 3 Stocks

    These cancer research stocks offer both a high ceiling and the potential to save lives.
  7. Entrepreneurship

    Should I Have An IPO on My Business

    The ultimate outside investment opportunity is going public through an initial public offering. However, IPOs come with costs that you may want to avoid.
  8. Stock Analysis

    Costco, Target or Walmart: Which is the Best Bet?

    These three retailers have all been long-term winners. It that likely to continue? If so, which is the best bet?
  9. Charts & Patterns

    Should Investors Get Into Oil Now?

    Oil has enjoyed a steady climb after a violent plunge. Where is it going next, and how can investors profit?
  10. Stock Analysis

    Is There Any Upside Left in Costco?

    Costco's stock has performed exceptionally well over the past five years, but does it need a breather?

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center