Across the Board (Finance) - Explained
What is Across the Board
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Table of ContentsWhat is Across the Board?How is Across The Board Used?Academic Research on Across The Board
What is Across the Board?
The term, across the board, is a market-wide directional movement, or a market condition where the majority of sectors and stocks move in exactly the same directions. Usually, market-wide events bring about these movements. The phrase now refers to improvement (or decrease) in economic performance across all metrics for the stock of a particular company, or across a specific part of a national economy.
How is Across The Board Used?
Supposing you get to know in the financial media that the stock market is currently up across the board, this implies that majority of the stocks are up on that particular day's trading. The term comes from the New York Stock Exchange big board, one which stock prices were previously written on; when most of the prices were either up or down, these upward or downward movements were shown across the board. The Big Board serves as a metonym for the New York Stock Exchange. For example, here are some latest headlines: Forbes - "Improvement Seen Across The Board For Urban Outfitters In The First Quarter", after the company surpassed expectations for sales and also earnings, or from Home Textiles Today - "Burlington: Home a hit across the board" after "lower markdowns and slightly better mark-ups delivered a strong quarter" for Burlington Stores. This term is also used globally, for example, to show extensive tumult or improvements in some economic sectors: for instance in The Philippine Star - "Term deposit rates up across the board" or in the Gulf Times - "Across-the-board selling pressure weighs on Qatar shares". The focus of journalism on the stock market is a common place where the idiom is used, like the article from Money: "Losses were felt across the board in the first quarter not just in the sectors which performed excellently well when 2017 began but in both areas of the market that were economically sensitive, like basic materials and real estate, and defensive areas, like utilities and consumer staples.
Academic Research on Across The Board
- Financial market contagion in the Asian crisis, Baig, T., & Goldfajn, I. (1999). Financial market contagion in the Asian crisis. IMF staff papers, 46(2), 167-195. This paper tests for evidence of contagion between the financial markets of Thailand, Malaysia, Indonesia, Korea, and the Philippines. We find that correlations in currency and sovereign spreads increase significantly during the crisis period, whereas the equity market correlations offer mixed evidence. We construct a set of dummy variables using daily news to capture the impact of own-country and cross-border news on the markets. We show that after controlling for own-country news and other fundamentals, there is evidence of cross-border contagion in the currency and equity markets.
- Strategy and the business portfolio, Hedley, B. (1977). Strategy and the business portfolio. Long range planning, 10(1), 9-15. In this article the author goes on to develop the conclusion reached in his previous article which appeared in the December edition of Long Range Planning. These conclusions concerned the requirements for strategic success for an individual business, here they are developed into their implications for strategy development in the typical multibusiness company. It is argued that relative competitive position and growth are the two fundamental parameters which must be considered in determining the strategy that an individual business should follow when viewed within the context of the company's overall business portfolio. The likely patterns of business strategy which will lead to overall corporate success are discussed and contrasted with those which can lead to disaster. The key is that strategies should be made to differ widely from business to business, as a function of the growth and relative competitive position of each business and the company's overall resource position particularly with respect to cash. The across the board defensive measures which many companies have adopted in recent years as their response to the pressures of inflation and recession are therefore argued to be singularly inappropriate for the long term. The business portfolio concept provides a superior approach for developing the differentiated strategic business objectives which are necessary for any company to make the most of its opportunities.
- Capital flows and capital-market crises: the simple economics of sudden stops, Calvo, G. A. (1998). Capital flows and capital-market crises: the simple economics of sudden stops. Journal of applied Economics, 1(1), 35-54. The paper studies mechanisms through which a sudden stop in international credit flows may bring about financial and balance of payments crises. It is shown that these crises can occur even though the current account deficit is fully financed by foreign direct investment. However, equity and long-term bond financing may shield the economy from sudden stop crises. The paper also examines possible factors that could trigger sudden stops, and argues that the greater independence that countries have, as compared to regions of a given country, could help to explain why sudden stop crises are more prevalent and destructive at international than at national levels.
- Exchange rate volatility across financial crises, Coudert, V., Couharde, C., & Mignon, V. (2011). Exchange rate volatility across financial crises. Journal of Banking & Finance, 35(11), 3010-3018. This paper studies the impact of global financial turmoil on the exchange rate policies in emerging countries. Spillovers from advanced financial markets to currencies in emerging countries are likely to be exacerbated during crisis periods. To test this hypothesis, we assess the exchange rate policies by currencies volatility and investigate their relationship to a global financial stress indicator, measured by the volatility on global markets. We introduce the possibility of nonlinearities by running smooth transition regressions over a sample of 21 emerging countries from January 1994 to September 2009. The results confirm that exchange rate volatility does increase more than proportionally with the global financial stress, for most countries in the sample. We also evidence regional contagion effects spreading from one emerging currency to other currencies in the neighboring area.
- Finance and the sources of growth at various stages of economic development, Rioja, F., & Valev, N. (2004). Finance and the sources of growth at various stages of economic development. Economic Inquiry, 42(1), 127-140. This article studies the effects of financial development on the sources of growth in different groups of countries. Recent theoretical work shows that financial development may affect productivity and capital accumulation in different ways in industrial versus developing countries. This hypothesis is tested with panel data from 74 countries using GMM dynamic panel techniques. Results are consistent with the hypothesis: finance has a strong positive influence on productivity growth primarily in more developed economies. In less developed economies, the effect of finance on output growth occurs primarily through capital accumulation.
- The drivers of financial globalization, Lane, P. R., & Milesi-Ferretti, G. M. (2008). The drivers of financial globalization. American Economic Review, 98(2), 327-32.