I have a question more suitable for discussion. I often see in the premarket that various stocks are rising, and in a given report on investment sites, for example, it's stated that it's rising based on a change in analyst ratings.
Does it really work like that? But then that can also smack of market manipulation can't it? I'll give you an example 👇
Netflix shares $NFLX rose 3.1% in premarket today after JPMorgan raised its price target for the streaming giant to $470, an 18% rise while maintaining an "overweight" rating, saying its crackdown on password sharing could lead to revenue growth.
Sometimes it really is. Movements outside of trading hours are mostly based on news...
Market manipulation can be Musk's tweet... the market is influenced by many factors from all fears and some more/some less... probably each of us is influenced by something different...
I agree with what Tomas wrote, Analyst Rating is a short term price change for a stock, some people or companies just give a lot of weight to analysts outlook, but for me it doesn't mean much.
So the ratings are probably not outright manipulation... although Hindenburg, for example, tends to be very much like that.
As has been said here, it's mostly a short-term effect and manipulation, if any, occurs to a minimal to negligible degree in my opinion.
A lot of people see this as a confirmation of their thesis (society is doing well/not doing well, etc.)
That is a very good question. Changes in analyst ratings and target prices can really affect a stock's price, especially when it comes to major investment banks or brokerage firms. However, this is not always the rule and is often more of a short-term effect. There are certainly concerns about market manipulation if an analyst deliberately inflates the target price of a stock to help some party (e.g. the issuer of the stock or the investment bank for which the analyst works). However, this is illegal and most serious analysts would not dare to do this. Probably another report will come in during the day and it will completely wipe this one out, so at the end of the day, the 3% will be long dead.