E-file your Income Tax Returns for FREE

E-file your Income Tax Returns for FREE

Bellwether

Reviewed by Apoorva | Updated on Sep 30, 2020

Catalogue

Introduction

Performance of certain companies, stocks, and bonds are considered to indicate the condition of the economy and financial markets because their performance is well-correlated with a trend. In this context, a bellwether is an event or indicator that shows the possible presence of a trend. Bellwether companies are the market leaders in their respective sectors and are known as blue chips. The term bellwether is a combination of ""bell"" and ""wether.""

Understanding Bellwether

A bellwether stock is used to measure the performance of the market or macro-economy. The bellwether stock's status may change over time. In the case of the equities market, the well-established companies in an industry are considered as the bellwethers. Some have also been resistant to economic downturns.

Related Terms

Recent Terms