One of the most watched nation in the world is the United States of America. Not only is it one of the most powerful nations in the world in terms of land area, population, and influence, it is also one of the powerhouses in the top economies that affect the global market.
That’s why it’s only natural that knowing the status of the US economy is a priority among traders and analyst. And to know the status of the economy, one must only look to these famously reliable indicators. Here are the seven best indicators of the US economy.
Gross Domestic Product
The Gross Domestic Product is one of the most famous indicators of economic health. It supplies the information about the total value of produced goods and services. This will give you a rough estimation of whether the economy has been growing or slowing. Some of the data that are taken into consideration in the computation of the GDP are government spending, consumer spending, foreign trade, and business investment.
One of the best indicators for any nation is the employment report. It shows the welfare of a country by indicating how many jobs were filled in and pinning down the unemployment rate. Naturally, the better the numbers are for the jobs report, the healthier the economy is. Likewise, the higher the unemployment, the worse it is for a country. More jobs means that more businesses are blooming, more money is circulated, and the more vigorous the economy is.
Another important indicator is the nation’s industrial production. A gauge of the output of manufactured goods of a country’s various industries indicate the health of economy by measuring its production power. More production means more demand and thus a better business for the country’s producers.
A report on residential sales is produced by the Department of Commerce monthly. Home sales is considered as an accurate depictor of economic health because it represents a major purchase for people. The more people that are able to afford a home means that the consumer sentiment is well into the green territory. A happy citizen means a happy economy.
It is essential that traders pay attention to the happenings in the economy. These indicators will paint them a big picture of how the US economy is faring in general. These are a big help in formulating trading strategies. That’s why research as much as you can and as thorough and win the market.
The Three Most Insane Indicators
The stock market is simple if you think about it. All you have to do is buy the financial instrument at a low price and sell the financial instrument at a high price. Buy low and sell high is the golden rule. What’s complicated is predicting when these lows and highs are possible. That’s why traders and investors rely on different indicators and factors to predict the future of a certain financial instrument. Indicators and factors include the Gross Domestic Product (GDP), oil prices, the Consumer Price Index (CPI), unemployment data and other technical indicators like Stochastics, Money Flow Index, and Relative Strength Index. All these technical and economical indicators are good and well however, there is the part of the economic analysis where indicators have taken on the most crazy forms. The following are the most insane indicators in the world that apparently worked at some point despite them having no connection with any metrics with the alpha beta. Let’s see if its true.
Bangladesh Butter Production
You might be wondering why the production of butter in Bangladesh, India would affect the performance of the US stock market. According to some experts, it is a relatively accurate prediction. As per history, it is said that the butter production multiplied by two will be the S&P 500 Index’s percentage increase or decrease. For example, a 3% increase in butter production means a 6% increase for the S&P. Although, it is as true as the rising sun for its believers, there is no real basis for this indicator.
Swimsuit Issue Cover of Sports Illustrated
Sports Illustrated is one of the most insane indicator in this list with the market performance being predicted with the nationality of Sports Illustrated Cover models. According to this indicator, every time the magazine hires an American model to pose for the cover, the stock market is in for a double digit increase while non-American models spells disaster for the stock market. Although it’s nice to think that looking at models can predict your investment, there is no real basis for this indicator as well.
Triple Crown Victors
In this insane indicator, horseracing is the key. According to legend, if a horse wins the Triple Crown, the Dow Jones Industrial Average will likely plummet. This means if you want to gain in the market, bet your investments against the winning horse.
People really want to find any way to maximize their investments even if it takes believing in the most ridiculous indicators. This is all good and fine, if it makes you feel better but always remember to get facts from all possible resources other than these kinds of indicators.