What is The Capital Markets (simple)?

"Capital markets typically involve issuing instruments such as stocks and bonds for the medium-term and long-term. In this respect, capital markets are distinct from money markets, which refer to markets for financial instruments with maturities not exceeding one year.

Capital markets have numerous participants including individual investors, institutional investors such as pension funds and mutual funds, municipalities and governments, companies and organizations and banks and financial institutions. Suppliers of capital generally want the maximum possible return at the lowest possible risk, while users of capital want to raise capital at the lowest possible cost.

The size of a nation’s capital markets is directly proportional to the size of its economy. The United States, the world’s largest economy, has the biggest and deepest capital markets. Capital markets are increasingly interconnected in a globalized economy, which means that ripples in one corner can cause major waves elsewhere. The drawback of this interconnection is best illustrated by the global credit crisis of 2007-09, which was triggered by the collapse in U.S. mortgage-backed securities. The effects of this meltdown were globally transmitted by capital markets since banks and institutions in Europe and Asia held trillions of dollars of these securities."


( http://www.investopedia.com/terms/c/capitalmarkets.asp#ixzz3dQYofGAk )

What Is The Money Market (expanded)?

Money Market: What Is It?
By Investopedia Staff

"The money market is a subsection of the fixed income market. We generally think of the term fixed income as being synonymous to bonds. In reality, a bond is just one type of fixed income security. The difference between the money market and the bond market is that the money market specializes in very short-term debt securities (debt that matures in less than one year). Money market investments are also called cash investments because of their short maturities.


Money market securities are essentially IOUs issued by governments, financial institutions and large corporations. These instruments are very liquid and considered extraordinarily safe. Because they are extremely conservative, money market securities offer significantly lower returns than most other securities.

One of the main differences between the money market and the stock market is that most money market securities trade in very high denominations. This limits access for the individual investor. Furthermore, the money market is a dealer market, which means that firms buy and sell securities in their own accounts, at their own risk. Compare this to the stock market where a broker receives commission to acts as an agent, while the investor takes the risk of holding the stock. Another characteristic of a dealer market is the lack of a central trading floor or exchange. Deals are transacted over the phone or through electronic systems.

The easiest way for us to gain access to the money market is with a money market mutual funds, or sometimes through a money market bank account. These accounts and funds pool together the assets of thousands of investors in order to buy the money market securities on their behalf. However, some money market instruments, like Treasury bills, may be purchased directly. Failing that, they can be acquired through other large financial institutions with direct access to these markets. "


Read more: http://www.investopedia.com/university/moneymarket/moneymarket1.asp#ixzz3dQSFUT2B

What Is The Money Market (simple)?

"A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. The money market is used by participants as a means for borrowing and lending in the short term, from several days to just under a year. Money market securities consist of negotiable certificates of deposit (CDs), bankers acceptances, U.S. Treasury bills, commercial paper, municipal notes, federal funds and repurchase agreements (repos)."
                             

( http://www.investopedia.com/terms/m/moneymarket.asp#ixzz3dQWONPrF )

What Is a Savings Account?

what is a savings account?...This is best summed up by John Gower of NerdWallet:

Savings 101: What is a Savings Account?

by John Gower

The basics

A savings account is likely the simplest type of bank account available to consumers. It allows consumers to store excess cash in a secure location (an insured bank or credit union) all while earning interest on the balance.

Cash stored in a savings account is less liquid, or accessible, than in a checking account but more so than cash stored in a CD (Certificate of Deposit).  The Federal Reserve Board’s Regulation D mandates that a depositor may make no more than six transfers/withdrawals out of a savings account per month. This includes transfers to other linked accounts at the same bank. A violation of this rule typically leads to a fee, and repeated violations may lead to account closure.

Savings rates

Arguably the most important consideration when choosing a savings account is finding the best savings interest rate. After all, earning interest is a primary function of the account.

Since a savings account is more liquid than a CD, banks will typically offer a lower rate than with a CD (which requires locking in funds for a specified period of time). In most cases, CDs also maintain the same interest rate for the duration of the term. Not so for savings accounts. Savings yields may fluctuate over time, subject to a variety of economic forces as well as the interests of the bank itself. This can be a positive for savers, in the case of rising interest rates, but can also disappoint for account holders experiencing a decline in yield.

Where to bank

Consider these three types of financial institutions when researching a savings account:

Banks

The biggest banks often seem appealing due to their abundance of branches, well-known brands, and variety of services, but they also tend to offer very low rates on savings accounts.

Credit unions

Credit unions tend to offer higher rates than banks for share accounts (their term for a basic savings account). You may need to meet certain membership requirements to join, however.

Online/internet banks

As a whole, high yield savings accounts at online banks maintain the best rates. The primary drawback is that, unlike a traditional brick-and-mortar bank or credit union, you can’t simply walk into a local branch for assistance.

https://www.nerdwallet.com/blog/banking/savings-101-savings-account/

https://www.nerdwallet.com/blog/author/john/

Implied Opening on Indices (Market Sentiment).

When you turn your TV (or app being it is 2015) to CNBC, Bloomberg, FOX Business, etc. in the mornings you will see numbers for implied opening as it pertains to the indices.

Implied opening is simply the deviation between future value and fair value:  Future Value - Fair Value = Implied Opening. The futures market (future value) is open 24/7 and therefore futures will usually not be price aligned with the fair value as fair value represent the trading of the actual (cash index) indices during pre-market. Once the opening bell rings and consequent liquidity picks-up, the indices factor in the futures market and vice versa.

And for the analytic types that does imply there are arbitrage opportunities that institutional investors seek to capitalize upon. However, transactions cost(s) must be taken in to consideration, which reduces or nullifies profits. "As soon as the index futures price premium, or discount to fair value, covers their transaction costs (clearing, settlement, commissions and expected market impact) plus a small profit margin, the computers jump in, either selling index futures and buying the underlying stocks if futures trade at a premium, or the reverse if futures trade at a discount." ( http://www.investopedia.com/articles/active-trading/070113/using-index-futures-predict-future.asp#ixzz3d44JV6Ll )