#Fincabulary 26 – Barometer Stock

Meaning – A security whose performance is considered to be an indicator of the performance of its particular sector or industry or the market as a whole. It is also referred to as a bellwether stock.

Barometer stocks are usually large-cap equities or respected blue-chip stocks that signal a bullish market during periods of favorable performance and signal a bearish market during periods of unfavorable performance. Barometer stocks can have a large influence on the economic health of the country. Market analysts sometimes say something to the effect of, “What’s good for [barometer stock] is good for the country.”