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. Common Stock Equivalent

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

    A slang term used to describe a stock that has appreciated dramatically. ...
  3. Indicator

    Statistics used to measure current conditions as well as to forecast ...
  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 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. Fundamental Analysis

    What is the difference between cost of equity and cost of capital?

    Read about some of the differences between a company's cost of equity and its cost of capital, two measures of its required returns on raised capital.
  5. Fundamental Analysis

    How do I calculate the debt-to-equity ratio in Excel?

    Understand the basics of the debt to equity ratio, how it is interpreted as a measure of financial stability and how it is calculated in Microsoft Excel.
  6. Markets

    What Is The Current Market Supply For Oil?

    Oil prices skidded by more than 10 %, sparking a sell-off in U.S. equities of 3.5 %, a Treasury rally and global headlines of growth fears and tumult.
  7. Chart Advisor

    These 4 Stocks are Hitting Technical Headwinds

    These up trending stocks are showing signs of weakness, indicating it may be time to sell.
  8. Options & Futures

    What other sectors are most similar to oil & gas drilling?

    Learn about sectors with companies that face similar challenges and rewards as the oil and gas drilling sectors. One example is gold exploration companies.
  9. Fundamental Analysis

    Why would I need to know how many outstanding shares the shareholders have?

    Find out why shareholders should know how many outstanding shares have been issued by a corporation, and learn what happens when more shares are issued.
  10. Mutual Funds & ETFs

    What are the most common ETFs that track the forest products sector?

    Explore the most common exchange-traded funds that track the forest products sector. Review the performance, expense ratios and holdings of the two top ETFs.

You May Also Like

Hot Definitions
  1. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  2. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  3. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  4. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  5. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  6. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
Trading Center