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What is a Stock Chart?

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It’s not uncommon for us to get messages from people that are attracted to the idea of investing, but that lack the essential training or confidence to fully dive in.

For example, we hear from millennials all the time – many are starting to save and know they need to invest, but they’ve never had to look at a stock chart before. We also often hear from wealth managers that want to help their clients understand the financial landscape better.

Today’s post explains a concept that’s important for any person looking to dive headfirst into finance.

What is a stock chart?

The following infographic from StocksToTrade shares the three most common types of stock charts used, and the information typically found in them.

It’s the perfect step-by-step primer for someone that wants to learn the basics!

What is a Stock Chart?

What is a stock chart?

It’s simply a price chart that shows a stock’s price plotted over a time frame, and it shows a few key sets of information:

1. Stock symbol and exchange
The symbol for the stock, as well as the specific exchange it trades on.

2. Chart period
Typically daily, weekly, monthly, quarterly, or annually. Traders usually concentrate on daily and intraday data to forecast short-term price movements. Investors usually concentrate on weekly and monthly charts to spot long-term price trends.

3. Price Change
There are four key data points from a day’s trading: open, high, low, and close. “Open” is the price at the start of the day and “close” is the price at the end of the day. The “high” is the highest price during the session, while the “low” is the lowest.

4. Last Change
Displays the net change, positive or negative, from a previous price. On a daily chart, it would be from the previous day’s close.

5. Types of Charts
There are three basic types of charts used:

  • Line: Plots the closing price of a chart over time, helping you to see how a price is behaving.
  • Bar chart: Plots the open, high, low, and close (OHLC) for each day using bars.
  • Candle and stick chart: A visually appealing chart similar to a bar chart that shows OHLC data in an easy way.

6. Volume
Volume is the amount of stock that has been bought and sold within a specific period of time. If a stock moves on low volume, it means that few people are participating in the current price movement and the trend may not continue. Meanwhile, if a stock moves on high volume, it means many people are involved in the trade and the trend is more likely to continue.

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Markets

Animation: The 20 Largest State Economies by GDP in the Last 50 Years

This animation shows how the largest state economies by GDP have changed over the last five decades of time, and what such a ranking looks like today.

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Animation: The 20 Largest State Economies by GDP

When it comes to understanding the size and scope of the $18 trillion U.S. economy, it’s sometimes easier to consider that it’s the sum of many parts.

Many states already have economies that are comparable to some of the world’s largest countries, giving you a sense of what they might be combined.

And while every state plays a role in the bigger picture, some states such as New York and California have an outsized impact on fueling the country’s overall economic engine.

The State of State Economies

Today’s animation comes to us from SavingSpot, and it covers the size of state economies by GDP going back all the way to 1963.

The video uses inflation-adjusted data from the U.S. Bureau of Economic Analysis, showing how the ranking of top state economies has changed over time as different states have taken advantage of economic booms.

Let’s dive into the data to see how things have changed.

Going Back in Time

The earliest data in the animation comes from 1963, when New York led the pack with a $70.6 billion economy in inflation-adjusted terms.

State Economies by GDP, Inflation-Adjusted Chained $USD (1963)

RankState EconomyGDP, Billions of USD (1963)Share of U.S. Economy
🇺🇸 United States (Total)$607.0100.0%
#1New York$70.611.6%
#2California$67.811.2%
#3Illinois$39.56.5%
#4Pennsylvania$34.55.7%
#5Ohio$33.35.5%
#6Michigan$30.55.0%
#7Texas$29.34.8%
#8New Jersey$23.43.9%
#9Massachusetts$17.42.9%
#10Indiana$15.62.6%
#11Florida$14.72.4%
#12Missouri$13.62.2%
#13Wisconsin$12.72.1%
#14North Carolina$12.62.1%
#15Virginia$11.71.9%
#16Washington$11.21.8%
#17Minnesota$10.71.8%
#18Georgia$10.31.7%
#19Maryland$10.31.7%
#20Connecticut$9.91.6%
#21Louisiana$9.71.6%
#22Tennessee$9.11.5%
#23Kentucky$8.41.4%
#24Iowa$7.91.3%
#25Alabama$7.31.2%
#26Oklahoma$6.21.0%
#27Kansas$6.11.0%
#28Colorado$5.91.0%
#29Oregon$5.70.9%
#30District of Columbia$5.10.8%
#31South Carolina$5.10.8%
#32West Virginia$4.60.8%
#33Arizona$4.50.7%
#34Mississippi$4.40.7%
#35Nebraska$4.30.7%
#36Arkansas$3.80.6%
#37New Mexico$3.00.5%
#38Utah$3.00.5%
#39Rhode Island$2.70.4%
#40Maine$2.40.4%
#41Hawaii$2.40.4%
#42Montana$2.00.3%
#43Delaware$1.90.3%
#44Idaho$1.80.3%
#45Nevada$1.80.3%
#46New Hampshire$1.70.3%
#47North Dakota$1.60.3%
#48South Dakota$1.60.3%
#49Wyoming$1.40.2%
#50Alaska$1.10.2%
#51Vermont$1.00.2%

California ($67.8 billion), Illinois ($39.5 billion), Pennsylvania ($34.5 billion) and Ohio ($33.3 billion) round out the top five, and together they added up to 40.5% of the national GDP.

The Largest State Economies by GDP Today

Looking at the most recent data from 2017, you can see the ranking changes significantly:

State Economies by GDP, Inflation-Adjusted Chained $USD (2017)

RankState EconomyGDP, Billions of USD (2017)Share of U.S. Economy
🇺🇸 United States (Total)$18,051100%
#1California$2,57614.3%
#2Texas$1,6169.0%
#3New York$1,4147.8%
#4Florida$8834.9%
#5Illinois$7454.1%
#6Pennsylvania$7013.9%
#7Ohio$5913.3%
#8New Jersey$5473.0%
#9Georgia$5112.8%
#10Michigan$4592.5%
#11North Carolina$4842.7%
#12Virginia$4642.6%
#13Massachusetts$4902.7%
#14Washington$4812.7%
#15Maryland$3632.0%
#16Indiana$3211.8%
#17Arizona$2971.6%
#18Minnesota$3221.8%
#19Tennessee$3151.7%
#20Wisconsin$2921.6%
#21Colorado$3231.8%
#22Missouri$2761.5%
#23Connecticut$2391.3%
#24Louisiana$2271.3%
#25Alabama$1931.1%
#26South Carolina$1991.1%
#27Kentucky$1851.0%
#28Oregon$2081.2%
#29Oklahoma$1911.1%
#30Iowa$1690.9%
#31Nevada$1430.8%
#32Kansas$1480.8%
#33Utah$1500.8%
#34Arkansas$1140.6%
#35District of Columbia$1220.7%
#36Mississippi$1000.6%
#37Nebraska$1110.6%
#38New Mexico$910.5%
#39Hawaii$790.4%
#40West Virginia$710.4%
#41New Hampshire$740.4%
#42Delaware$640.4%
#43Idaho$670.4%
#44Maine$560.3%
#45Rhode Island$530.3%
#46Alaska$520.3%
#47Montana$440.2%
#48Wyoming$390.2%
#49South Dakota$450.3%
#50North Dakota$510.3%
#51Vermont$300.2%

California is the largest economy today – it has a state GDP of $2.6 trillion, which is comparable to the United Kingdom.

Meanwhile, Florida and Georgia are two states that did not crack the top 10 back in the 1960s, while Texas jumped up to become the second largest state economy. It’s actually not a coincidence that all of these states are in the southern half of the country, as air conditioning has played a surprisingly pivotal role in shaping modern America.

In fact, the share of the nation’s population living in the Sunbelt rose from 28% in 1950 to 40% in 2000, and this increase in population has coincided with economic growth in many of the states that used to be a sweaty mess.

A Final Look

Here is a final animated version of the top 10 largest states by GDP, also provided by SavingSpot:

Animation: The 20 Largest State Economies by GDP in the Last 50 Years

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Where the World’s Banks Make the Most Money

Last year, the global banking industry cashed in an impressive $1.36 trillion in profits. Here’s where they made their money, and how it breaks down.

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Where the World’s Banks Make the Most Money

Profits in banking have been steadily on the rise since the financial crisis.

Just last year, the global banking industry cashed in an impressive $1.36 trillion in after-tax profits ⁠— the highest total in the sector seen in the last 20 years.

What are the drivers behind revenue and profits in the financial services sector, and where do the biggest opportunities exist in the future?

Following the Money

Today’s infographic comes to us from McKinsey & Company, and it leverages proprietary insights from their Panorama database.

Using data stemming from more than 60 countries, we’ve broken down historical banking profits by region, while also visualizing key ratios that help demonstrate why specific countries are more profitable for the industry.

Finally, we’ve also looked at the particular geographic regions that may present the biggest opportunities in the future, and why they are relevant today.

Banking Profits, by Region

Before we look at what’s driving banking profits, let’s start with a breakdown of annual after-tax profits by region over time.

Banking Profit by Year and Region ($B)

 2009201020112012201320142015201620172018
Global ($B)$388$530$635$703$859$963$1,070$1,065$1,144$1,356
United States$19$118$176$263$268$263$291$275$270$403
China$95$135$174$225$255$278$278$270$301$333
Western Europe$78$34$21-$70$28$95$154$159$186$198
Rest of World$196$243$265$285$309$327$348$361$387$421

In 2018, the United States accounted for $403 billion of after-tax profits in the banking sector ⁠— however, China sits in a very close second place, raking in $333 billion.

What’s Under the Hood?

While there’s no doubt that financial services can be profitable in almost any corner of the globe, what is less obvious is where this profit actually comes from.

The truth is that banking can vary greatly depending on location ⁠— and what drives value for banks in one country may be completely different from what drives value in another.

Let’s look at data and ratios from four very different places to get a sense of how financial services markets can vary.

CountryRARC/GDPLoans Penetration/GDPMargins (RBRC/Total Loans)Risk Cost Margin
Global Average5.1%124%5.0%0.8%
United States5.4%121%5.0%0.4%
China6.6%147%6.0%1.4%
Singapore13.0%316%4.6%0.4%
Finland3.4%133%2.8%0.2%

1. RARC / GDP (Revenues After Risk Costs / GDP)
This ratio shows compares a country’s banking revenues to overall economic production, giving a sense of how important banking is to the economy. Using this, you can see that banking is far more important to Singapore’s economy than others in the table.

2. Loans Penetration / GDP
Loans penetration can be further broken up into retail loans and wholesale loans. The difference can be immediately seen when looking at data on China and the United States:

CountryRetail LoansWholesale LoansLoan Penetration (Total)
United States73%48%121%
China34%113%147%

In America, banks make loans primarily to the retail sector. In China, there’s a higher penetration on a wholesale basis — usually loans being made to corporations or other such entities.

3. Margins (Revenues Before Risk Costs / Total Loans)
Margins made on lending is one way for bankers to gauge the potential of a market, and as you can see above, margins in the United States and China are both at (or above) the global average. Meanwhile, for comparison, Finland has margins that are closer to half of the global average.

4. Risk Cost Margin (Risk Cost / Total Loans)
Not surprisingly, China still holds higher risk cost margins than the global average. On the flipside, established markets like Singapore, Finland, and the U.S. all have risk margins below the global average.

Future Opportunities in Banking

While this data is useful at breaking down existing markets, it can also help to give us a sense of future opportunities as well.

Here are some of the geographic markets that have the potential to grow into key financial services markets in the future:

  1. Sub-Saharan Africa
    Despite having 16x the population of South Africa, the rest of Sub-Saharan Africa still generates fewer banking profits. With lower loan penetration rates and RARC/GDP ratios, there is significant potential to be found throughout the continent.
  2. India and Indonesia
    Compared to similar economies in Asia, both India and Indonesia present an interesting banking opportunity because of their high margins and low loan penetration rates.
  3. China
    While China has a high overall loan penetration rate, the retail loan category still holds much potential given the country’s population and growing middle class.

A Changing Landscape in Banking

As banks shift focus to face new market challenges, the next chapter of banking may be even more interesting than the last.

Add in the high stakes around digital transformation, aging populations, and new service opportunities, and the distance between winners and losers could lengthen even more.

Where will the money in banking be in the future?

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