Author(s)

Ying XING

Corresponding Author

Ying XING

ABSTRACT

Under the condition of economic globalization and financial market integration, with the development of international trade, transnational direct investment, capital flow and modern information technology, the information set on which capital market pricing is based should also be global. The liquidity of a good financial market must be quite sufficient. If the stock market shows insufficient liquidity, the market is lacking in popularity and will lead to abnormal transactions. The United States is the most developed economy in the world, which has a great influence on the global stock market, while China is the largest emerging market in the world, and the influence of Chinese stock market on international stock market is increasing day by day. China and the United States are the two major economies that attract the most attention in the world today, and the trade issues between the two countries have also been widely concerned by all countries in the world. Based on the trade balance algorithm, this paper studies the spillover effects of the same resource industries in China and the United States stock markets, in order to help the government prevent financial risks and make appropriate investment decisions for investors.

KEYWORDS

Capital market, Stock market, Trade balance algorithm, Spillover effect