Financial Market Data, Rates and Indicators
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[br]Financial Market Data, Rates and Indicators are vital to tracking the progress or value of national economies, commodities, goods, services, exchange rates, stocks and bonds, and much more. We have collected some of the most important here.
Much of what we see in the industry is driven by the direction rates and indicators are headed. Investors are constantly looking for trends, and betting billions of dollars a day based on these figures. There are rates and indicators that cover stock markets, unemployment rates, the price of oil, the value of the US dollar or euro, GDP, and much more.
Governments’ monetary and fiscal policies are set based on these rates and indicators. In fact, these national decisions made by central banks are measured by rates and indicators themselves. An expansionary monetary policy can be quantified by the central bank’s target federal lending rate (commonly referred to as the “interest rate”). The interest rate, in turn, is a vital indicator, which continues to affect the entire economy.[br]
A rate or indicator is simply a measurement of the value of something at any given time – it could fluctuate by the minute, by the day, or by the year. These can be statistics, such as the unemployment rate, the inflation rate, or a consumer price index. Without up-to-date, relevant, accurate economic indicators, investors, lawmakers, and business leaders cannot make informed or educated decisions.
One phenomenon economists have yet to be able to accurately predict or even fully understand is the business cycle. However, they do know that economic indicators swing with relation to business cycles in various manners. They can be procyclical, countercyclical, or acyclical.
Procyclical indicators move in the same direction as the economy. The NASDAQ composite often rises as the economy improves, as does GDP. Countercyclical indicators move they move in the opposite direction as the economy. The most obvious example of a countercyclical indicator is unemployment; it rises as the economy worsens.
Acyclic indicators have no real relation to economic progress. Often, these are not economic indicators at all, so they are of minimal relevance here. If an indicator is acyclic, it does not help us understand or forecast economic growth or contraction and is not valuable in our economic decisions.
Timing and the frequency of the data are also important. The timing can be leading, lagging, or coincident indicators. Leading indicators are those which have a tendency to predict what the economy will do, such as stock markets. Stock markets can react to news and events almost immediately and thus will rise or fall before the economy as a whole does.
Lagging indicators take much longer to reflect what the economy does. For example, the unemployment rate only falls a few quarters after the economy improves. The third type is a coincident indicator. This moves in synch with the economy, like GDP.
The frequency of an indicator reflects when the data are released. It could be by the minute (NASDAQ) or by the quarter (GDP figures).
