What are the key relationships between economic indicators and indices everyone should be aware of?

Economic Indicators

Oct 20, 2013 Update

For the week gold is strong GLD, I like silver SLV, but I must admit these two commodities are very volatile. Equities continue to look strong and Europe such as VGK are on the move with Spain EWP leading the way beating the US S&P 500 SPY, VOO & IVV. Telecomm has had a big move up in momentum such as IXP and VOX. The Market is smoking hot and I think going higher with Fed chair Janet Yellin in place and the Syria-Egypt events subdued. I remain equity heavy.

My opinion answered for educational reasons. Investments have risk of loss the investor must be willing to bear.

Aug 27, 2013 Update

I noticed that the one of the top performing ” for the trailing 12 months has been “Austria” with US NYSE ticker symbol EWO with a trailing 12 month performance of 31%. Also, Belgium, ticker EWK continues to perform well and both have over 5% performance in the last month when the United States Market has lost money. Again, the international Markets to include Precious Metals like Gold and Silver, GLD and SLV have great performance. Silver has crazy high 1 month performance. In the Precious Metals area, I like Glitter, GLTR which has 4 metals of Gold, Silver, Platinum and Palladium. Nice.

Update to Answer will be later as time permits: “The key to Tactical Sector Rotation for equities (stocks), fixed income (bonds), commodities, inverse counter market investments, international countries how/when to trade precious metals Gold & Silver of how to trade these Sectors will be discussed.

Today, Thursday August 15, 2013 I am seeing the Materials sector with momentum, particularly ticker GLTR which owns the precious metals Gold, Silver, Platinum and Palladium. The European countries are performing well such as Austria EWO, Belgium EWK, France EWQ, Sweden EWD, Netherlands EWN and for high income dividend lovers Global X Super Dividend SDIV.”

Aug 17, 2013 Update

Other Counter Market ETFs doing well, at the moment, are tickers: SVXY, SH and TBF, TBT. Study these, SVXY measures volatility on the ViX and I think it is not leveraged, 1X (one times) the inverse S&P 500. SH is the direct inverse of the S&P500 and TBF is 1X inverse 20+ US Treasury. TBT is 2X leveraged inverse of 20+US Treasury. If you think interest rates in the US are going Up, then TBF and TBT are your best bet on the fixed income side.

This is a fluid relationship because all economic indicators move all indexes in some way. I guess what you really want to know is which economic indicators are more influential in moving which indexes. If you know this, then you know when to Buy, Sell and Hold your particular type of investments.

Keep in mind there are many Economic Indicators

If you live in the US, then you can find at BEA (Bureau of Economic Analysis) department of the US Government. If you live in an international country look at the IMF, International Monetary Fund or the World Bank for economic data. Keep in mind there are hundreds of indexes, I say again, hundreds considering the world is Global.

Key Economic indicators that Move the Markets in whatever country you live in on the Planet:
Examples:

Unemployment rate – moves all equity market indexes
Housing Starts – moves housing and home building indexes and other equity indexes
CPI, Consumer Price Index (This is a measure of inflation)- affects interest rate sensitive investments such as Fixed Income (Bonds), Dividend paying indexes and major market indexes. This also can cause the Fed to raise of lower interest rates.
Industrial Production – Major industrial indexes such as Dow Jones and S&P 500 in the US and equivalent indexes in international countries
Bankruptcies – Major Market indexes
GDP, Gross Domestic Product – affects all indexes of all asset classes
Retail Sales – Affects Consumer Discretionary equities and major equity markets.
Money Supply – affects major markets and can affect interest sensitive asset class indexes

If you are in the US, then I recommend to look a Barron’s Data Bank economic components to get more familiar of economic indicators at the BEA. Our firm tracks numerous global economic indicators.

For US investors I recommend to track your interest rates on your futures Market. Ticker symbols are: FVX, TNX and TYX these are the 5Yr, 10Yr and 30Yr interest rates respectively.

The best way to track indexes is ETFs (Exchange Traded Funds)

They are close to many indexes, not exact, but close. There are so many. Please see my other answers Like this one below. It is lot of information below in this Answer.

Exchange-Traded Funds: Are there ETF’s that would make sense to use in a buy and hold strategy?

See many of my other answers because I may provide other Ticker Symbols of other major indexes.

Update to Answer:

My favorite ETF Global ticker symbols I track on US exchanges are as follows: (Later I will explain how to use them for performance in investment portfolios under the tactical method when I have more time to add to the answer)
11 Key Global Sectors Tickers: IXG (VFH-US) Financials, EXI (VIS-US)Industrials, IXN (VGT-US) Technology, IXP (VOX-US) Telecommunications, JXI (VPU-US) Utilities, GRI (VNQ-US) Global Real Estate, IXC VDE-US) Energy, KXI (VDC-US) Consumer Non-Cyclical Staples, RXI (VCR-US) Consumer Cyclicals, MXI (VAW-US) Basic Materials and IXJ VHT-US) Healthcare. INTERNATIONL: VGT, VPL,VEA,VEA,VGK, THE US MARKET: IVV, SPY and best price VOO.

Disclaimer:

ETFs have risk of loss which the investor must be willing to bear. This is answered for educational reasons and not intended for any recommendations.

Joe Cantu is a regular commentator for Quora on the following topics: Stock Market, Economics, Defined Benefit Pension Plans, Asset Management, Mutual Funds, Investing, and Exchange Traded Funds.

About the Author

Joe CantuChief Investment Officer for "Cantu Tactical Wealth Management", in GTAA, a Global Tactical Asset Allocation Manager using stocks, bonds and ETFs in momentum strategic portfolios. Joe worked as a discretionary portfolio manager at three of the largest Wall Street firms, Merrill Lynch, Smith Barney and Morgan Stanley. He is a West Point Graduate, B.S. degree economics concentration, with a Master's in Business, M.S. received in Heidelberg, Germany a division of Boston University, USA. Disclosure: Cantu uses Fidelity Investments to Custody clients assets and online Performance viewing.View all posts by Joe Cantu

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