8 critical economic indicators every investor should monitor
Understanding these essential market signals could make all the difference to your investment returns
Whilst stock markets don't perfectly mirror economic conditions, they typically rise in anticipation of economic growth and fall when conditions deteriorate. For investors looking to stay ahead of market movements, tracking the right economic indicators is essential.
Our expert analysis reveals the eight most important economic signals that could determine market direction:
Government Bond Yields: The Market's Crystal Ball
Government bond yields are amongst the most powerful predictors of economic shifts. As Clinton-era adviser James Carville famously noted, the bond market has the power to "intimidate everybody."
- "When gilt yields rise sharply, it often signals economic trouble ahead. Keep a close eye on weekly movements to spot emerging trends before they impact your portfolio."
GDP Growth Rate: Is Economic Expansion Sustainable?
Gross domestic product remains the cornerstone measurement of economic health, but its relationship with stock market performance is more nuanced than many realise.