Question

Which of the economic indicators that we reviewed measures the stock market ?

Answer 1

An indicator is defined as a statistic used to measure current conditions and to forecast economic or financial trends. The major indexes are also the key indicators for U.S. stocks. They are the Dow Jones Industrial Average (DJIA), the S&P 500 Index, and the Nasdaq Composite Index.

The DJIA, also known as the Dow, is an index of 30 top stocks listed on the New York Stock Exchange (NYSE). It is the most commonly used and frequently cited of all the leading indicators on the stock market. The S&P 500 Index consists of 500 stocks chosen based on market capitalization, liquidity, and their sectors of business. The S&P 500 is a broad-based U.S. equity market tracker. The index is a value-weighted index that is proportionate to the weight of each stock to its market value.The Nasdaq Composite Index is weighted by market capitalisation. This contains on the Nasdaq Stock Exchange more than 3,000 stocks. American depositary receipts, real estate investment trusts and a lot of small-cap stocks are included in the index.

GDP calculates the price value of all goods and services produced in the U.S. as a key indicator of the state of the economy. All usage occurring in both the public and private sectors is included in the data for this measure. GDP reports are published on a quarterly and annual basis.

CPI is a weighted average indicator of a combination of consumer goods and services. For all products within the chosen combination, the CPI is determined using price changes. Adjustments in rates are analyzed in relation to the cost of living by looking at changes in the CPI.