How To Watch Global and Macro Indicators
- Posted by scheplick
- on June 25th, 2012
You do not want to trade a single company’s stock if the macro-economy is trending in the opposite direction of your particular trade. Why? Because it will bring down any trade no matter how good the charts or fundamentals look. It is recommended, then, that the macro-economy is scanned to see if it aligns with your trade thesis. Below we’ve listed three tools to help you scan the macro-economy for insights, and direction.
FRED (Federal Reserve Economic Data): The St. Louis Fed’s website allows free access to its national economic data and information. This includes 45,000 economic time series from over 40 different sources. FRED is the most reliable source on the Internet today for macroeconomic data about the United States. To use it, go to http://research.stlouisfed.org, and click the “Data Tools” column at the top. Then click “Create Your Own Graphs.” From here, it is up to you to experiment. Play with different time series or download the data to Excel. Last week, Henry Blodget, over at Business Insider used FRED to demonstrate that “over the past 30 years, we’ve generated about $1 of economic growth for every $3 we’ve borrowed.”
Here are two charts that I watch on FRED:
Google Public Data Explorer: The Google Public Data Explorer thrives off its user interface, and global data. FRED (above) is perfect for economic data about the US while the Goolge Public Data Explorer is perfect for social, economic, government, and healthcare data from around the world. For example, if you think that more people smoke cigarettes during a recession, you could chart Smoking Prevalence over the price of the S&P 500. Or maybe you think that the banks in Ireland are next, after Spain, to make headlines in Europe. Pull up the percentage of Irish non-performing loans, and chart them against non-performing loans in the US over time. Follow this link here to use Google Public Data Explorer.
StockTwits $Macro: The $Macro stream on StockTwits.com is an efficient way to hear what the crowd is saying at any given moment about the macro-economy. The stream is a live conversation composed of links, charts, and commentary. Last week, Dynamic Hedge dropped this post about Macro economic indicators, and it largely influenced the post that you’re reading now. Another good stream to gauge the macro-economy is the $FED stream. This is a live conversation about all things Federal Reserve.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
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