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Question: You are required to find an article with respect to either one of the following issues below and analyze the relevance of the news item to the issues indicated below. The selected article should be current, i.e. from May 2017 onwards. a .Bond issue or rating agencies b. Financial statements c. Equity markets or stock valuation d. Capital budgeting of a business entity Answer: Introduction The discussion deals with the Equity market and stock valuation. The equity market refers to the market in which shares are issued and traded. The transactions are made either through exchanges or through other decentralized modes. The equity market or stock market allows the investors to get the ownership of companies with a potentiality to realize future gains and the companies access to capital (Chen and Tindall 2016). It is platform where the buyers and sellers interact to trade the securities that are listed in the exchange or privately transacted. The companies in order to accumulate capital sell off their shares or stocks in the market; each of the stock represents ownership of the company (Kopczuk 2015). Thus if the company earns a profit the investors can also get a part of it. In this case, a huge risk involved with the investors if the company suffers a loss. The more the demand for stocks of a particular company higher is the price of its shares. Article review The stock prizes for companies can influence an economy. Rise in the stock prizes indicates a healthy growing economy, similarly if trend of the stocks are downward then it indicates a weak economy or recession (Eaton et al. 2016). The present discussion deals with various financial issues with respect to rise and fall stock prize. The article chosen titled US stocks suffer worst fall in 6 years, published by financial times reporters on sixth of February 2018.The article highlights on the worst fall in the US stock market in comparison to the performance in the last six years. On sixth of February, the stock market witnessed a rapid selling of securities showing decline in the values of the same, this erased the profits of the market of the whole year. The sudden supply of the shares from the investors side raised a suspicion. The stock market index Dow-Jones Industrial Average in ten minutes shed more than 800 points. This fall can be marked as second highest in the whole decade. The Leuthold investment management strategist Jim Paulsen commented that this rapid sell-off may be due to automatic quantitative trade or a specific company or person can be blamed. By the end of the day, the SP-500 index was at 2648.94 that is 4.1% fall. This was the worst fall since august 2011.The Doq index fell to 175 points and Nasaq index fell to 6967.The bench mark indices of the countries fell tremendously, the Japan benchmark Topix fell 6.3%, South Koreas index kopsi composite fell 2.6% ,the Australian market ASX 200 also witnessed a fall down of 3.7%. The article also mentions that the Vix volatility Index known as the Wall Street fear gauge on that day reached its peak hit that is 37.32. Last until it had reached its highest when the Chinese currency devaluated in august 2015 (Chan 2015). This also exceeded the levels reached during the Greek debt crisis of 2015(Wickens 2017). The investors, who had expected that the market would remain calm and had a bet on it, suffered a huge loss. The exchange-traded fund named the pro shares suffered a huge loss of 32%, the Velocity Shares Short Vix also lost by 14.3%. Michael Arone, the chief investment strategist at state street global advisor, stated that the decline of the share values is a result of rapid rise in interest rates and inflation anticipation (Gal 2015). He was surprised to see this sudden continuous sale of securities. On raising the question whether this fall in the equity market affect on a long would term basis, to Donald Trumps deputy press secretary Raj Shah, he remarked that, these fluctuations do not have a short-term effect. The fundamental of the economy being strong, the situation can be made stable soon. The co chief investment officer of Bridgewater associates has also added that it was a phenomenon of classic late cycle behavior. There has been an increase in the pressure in the bond market as the banks have been relaxing the monetary policy. After the incident, it can be anticipated the Federal Reserve could again strengthen monetary policy more aggressively. The US deficit is also expected to rise, due to increase in tax cuts and rise in government borrowings the stock market has hit. The global share market has been terribly moved, there has been a panic within the shareholders who has been selling of their securities, raising the terror in the market. David Kelly, chief global strategist at JPMorgan asset management informed that the reason for this is not due to the rise in the interest rates (Maioand and Santa-Clara 2017). He pointed out an explanation to this; he said that this could be due to overdue of the correction of the share and the bond markets. He also expects the following week to be uneven for the stock market, but there is still a big doubt in the consequence. The Big Euro Zone markets are confirmed to run in negative for the year. Relevance with the chosen topic Many factors that can influence the stock market factors like overpricing of stocks rise in the interest rates fraudulent activities and Federal Reserve policies (Bernanke 2017). In the above discussion, a situation of a share market crash has been highlighted. Rapid sale in the market, the sellers are normally frightened for an unexpected economic event or crisis. This crash may affect the economy and individual customers (Sornette 2017). The stock market is not a real economy; the share market may encounter changes in the share prices due to many reasons such as correction of overvaluation and change in the interests rates. The chosen article focuses on the issue of sudden fall in the value of the shares of the US stock market. The economy may suffer from recession if the market continuously suffers from such fall (Farmer 2015). Conclusion The US stock market has faced a terrible fall in these security prices recently on 6th of February 2018. There was a sudden fall in the market making the economy weak. There are many factors like bank rates, inflations, deflation, economic and political regulations that can affect the security prices. A proper business plan and cautious investment decision may help to avoid the consequence. Reference and Bibliography Bernanke, B.S., 2017. Federal reserve policy in an international context.IMF Economic Review,65(1), pp.5-36. Chan, A., 2015. Chinas currency devaluation increases uncertainty, Economics: Asian Perspectives. Chen, J. and Tindall, M.L., 2016. Constructing Equity MarketNeutral VIX Portfolios with Dynamic CAPM.The Journal of Alternative Investments,19(2), pp.70-87. Eaton, J., Kortum, S., Neiman, B. and Romalis, J., 2016. Trade and the global recession.American Economic Review,106(11), pp.3401-38. Farmer, R.E., 2015. The stock market crash really did cause the great recession.Oxford Bulletin of Economics and Statistics,77(5), pp.617-633. Gal, J., 2015.Monetary policy, inflation, and the business cycle: an introduction to the new Keynesian framework and its applications. Princeton University Press. Kopczuk, W., 2015. What do we know about the evolution of top wealth shares in the United States.Journal of Economic Perspectives,29(1), pp.47-66. Maio, P. and Santa-Clara, P., 2017. Short-term interest rates and stock market anomalies.Journal of Financial and Quantitative Analysis,52(3), pp.927-961. Sornette, D., 2017.Why stock markets crash: critical events in complex financial systems. Princeton University Press. Wickens, M., 2017. A Macroeconomic Perspective on the Greek Debt Crisis. InPolitical Economy Perspectives on the Greek Crisis(pp. 157-175). Palgrave Macmillan, Cham.