Financial Indicator | Definition and Explanation |
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DXY index | Measures the value of the US dollar in relation to a range of foreign currencies. Also known as the US Dollar Inxes, it takes the average exchange rate of the USD and six other currencies. |
Unemployment rate growth | Tracks the change in the unemployment rate. It monitors trends in employment and is calculated as the percentage of the workforce that is unemployed but actively seeking employment. A higher rate means more people are losing jobs, while a lower unemployment rate growth indicates the opposite. |
Velocity of M2 Money Stock | Measures how quickly money is changing hands in the economy. It is calculated by looking at how many times a year the stock of M2 money is used to buy goods and services. A higher velocity indicates that money is being spent more quickly, which can be a sign of a strong economy. |
Margin Debt to Cash | Measures how much an investor borrows to invest in the stock market compared to how much cash they have available. A higher ratio indicates that investors are more leveraged, which can increase market risk. |
Buffet Indicator | Compares the total market capitalization of all publicly traded stocks to the GDP of the US. It determines if the stock market is overvalued or undervalued. A ratio over 100 indicates that the stock market is overvalued, while a low ratio indicates the opposite. |
VIX Index | Also known as the “fear index”, it measures the implied volatility of the stock market based on the S&P 500 over the next 30 days. A higher VIX indicates that investors expect greater volatility, while a lower VIX indicates the opposite. |
Shiller P/E Ratio | Measures the current stock price to the average inflation-adjusted earnings of the past 10 years. A high ratio indicates that stocks are overvalued, while a low ratio indicates the opposite. |
10Y bond yield growth | Measures the yield on 10-year government bonds. A higher yield indicates investors are demanding a higher return for lending money to the US government, which can be a sign of inflation or increased risk. |
Debt / GDP ratio | Compares a country’s total debt to its gross domestic product, and is used to assess the sustainability of a country’s fiscal position. A higher ratio indicates that the country has a larger debt burden compared to its economic output. |
Federal Funds Rate | The interest rate at which banks lend reserve balances to each other overnight. It is set by the Federal Reserve and used to control inflation and stimulate economic growth. |
Put/Call Ratios | Measures the trading volume of put options (contracts that allow investors to sell an asset at a specific price) compared to call options (contracts that allow investors to buy an asset at a specific price). A higher ratio indicates investors are more bearish, while a lower ratio indicates the opposite. |
Personal Savings Rate | The percentage of disposable income that households invest after expenses and taxes. A higher rate indicates that households are saving more, which can lead to decreased consumer spending and economic growth. |
AAII Sentiment | Measures the bullish, bearish, or neutral sentiment of individual investors over the next six months. |