Why do financial markets move up or down

Financial markets move about all day – but what makes them shift? Is it just investors responding to the news of the day or are there other factors at play?

In this episode of the Big Money Questions show, macro fund manager at M&G Investments Eric Lonergan has the answers.

He explains what is actually happening when asset prices rise and fall.

He also looks at why markets go in a completely different direction to the one that experts had predicted.

Markets are so often given human attributes such as ‘markets were spooked today…’, ‘markets believe…’, ‘fear spread across global markets’.

Eric considers whether there is any sense at all to this way of talking about markets and the role that emotions does play in their rise and fall.