People often say that the stock market is a barometer of the economy, that is, stock price movements change not only with the change of the economic cycle, but also indicate the change of the economic cycle.

Often, when the economy has not bottomed out, share prices have begun to rise, mainly due to investors' uniform judgement of the economic cycle.

We usually call the stock market a fictitious economy, and call it the real economy relative to the real economy, and the relationship between them can be said to be "like a shadow follows the shape", each can reflect the other side.

Due to resource constraints, people's expectations and external factors, the economic operation will not always be in equilibrium.

The frequent occurrence is that the economy is in a state of disequilibrium.

Correspondingly, the stock market also has the characteristics of fluctuating up and down.

When the social demand increases with the increase of population and consumption, the investment impulse of product price, worker's salary and capital owner will increase. The situation of investment is also increasing, and the market capital price (i.e. interest rate) is rising.

The increase in wages has increased personal consumption again.

With the increase of investment and the increase of personal disposable income, the quality of physical economy has been continuously improved, and the efficiency of enterprises has been increasing.

When the economy rose to a certain level, the growth rate of social consumption began to slow down, the supply of products exceeded demand, enterprises began to narrow the scale of production, the demand for capital in society decreased, the price of funds fell, and the economy became depressed.

When the real economy is running in accordance with the above cycle, the virtual economy represented by the stock market is also running in a dry cycle, but the operation cycle of the securities market is more advanced than the real business cycle.