Key Indicator

A key indicator is a precursor to a potential shift in an over-arching theme in the market. As the economy is growing more interconnected, one can look at pieces of the chain to evaluate how strong or weak the overall structure really is. By looking at specific key indicators, this gives you a glimpse into the inner workings of the system. There is not one perfect indicator; many must be analyzed for relevancy in a dynamic economy. An example would be information regarding employment. Since consumers make up so much of the U.S. economy, if people have jobs or are getting laid off, this will have huge ramifications for many industries. For individual stocks, many analysts perform “channel checks,” looking at the supply chain to see if there are increasing or decreasing orders, as an indicator for final sales numbers. If the supplier to a big manufacturer is producing more products, this is an indication that the main firm is receiving more orders from customers and hence more sales.


Earlier this year, I introduced a popular key indicator—the Baltic Dry Index—that measures the shipping rates of transporting bulk dry commodities worldwide. It is considered a key indicator because it gauges the demand of the basic raw material inputs that…

There is something wrong with this latest move upward in the U.S. stock market that began in the fall of 2011. Granted, U.S. stocks have been struggling over the last few months, but the rise that took place between October…

I’ve recently written about and presented a graph in these pages on how the S&P 500 stock market index has been outperforming the rest of the world’s stock markets. I have also written about the weak economic reports out of…

Historically, when the economy is recovering from a recession and heading into a cyclical growth phase, the market sectors that traditionally do well are the technology and semiconductor industries. Investors buy the stocks in these areas because earnings growth for…

I've been highlighting over the last few months how a key indicator, stock selling by corporate insiders, has continued to rise as the stock market rally continued. Why do we need to pay attention to what corporate insiders are doing?…

The U.S. economy is generating economic growth, but not consistently and not all sectors are experiencing the same level of business activity. Parts of the industrial economy are holding up well, the financials are improving, and the technology sector has…

Earnings seasons are always the best times of the year to be researching stocks. I have a number of benchmark stocks that I very much look forward to reviewing and I enjoy reading up on these companies even if I’m…

The underlying problem with consumers and their lack of participation in any economic recovery can be simply narrowed down to three facts: U.S. consumer spending increased by 0.8% in February over January (source: U.S. Commerce Department), the highest month-over-month increase in…

China’s appetite for gold bullion will not subside anytime soon. I’ve been writing for some time now, dear reader, about China’s desire to see the yuan (also referred to as the renminbi) become a global currency on par with the…

It makes for great headlines, as mainstream media tells everyone about the S&P 500’s impressive run. For the first quarter of 2012, the S&P 500 rose 12%. The S&P 500 is now just seven percent away from its all-time high.…

There are several key indicators that are questioning the record quarterly rise in the S&P 500, but one sticks out today. Corporate insiders are officers, directors and the largest shareholders of public corporations. It is critical to follow whether insiders…

At this point, almost everyone knows about Netflix, Inc. (NASDAQ/NFLX). The online streaming company offering movies and TV shows on demand was a pioneer in this field, which drove corporate earnings for the firm. Such innovation and profitability in corporate…

A “snowball” problem for America that just won’t go away could be a blessing in disguise for astute investors… Manufacturing jobs have fallen steadily since the 1950s. Low-wage countries, especially China, have been the center of the movement of factory…

U.S. GDP numbers released Friday, a key indicator of economic growth, confirm what I have been saying for weeks…the U.S. economic growth is slowing, not growing. Here are the full-year GDP numbers for the U.S. over the past three years:…

With the recent initial public offerings (IPOs) of social media companies, I think we should take a look at the recent performance of these stocks, because they might be a canary in the coal mine signaling overall market sentiment. Since…

Two different parts of the world, two very different ways countries are dealing with their economic contractions… In the U.S. yesterday, Eric Rosengren, President of the Federal Reserve Bank of Boston, said that the Fed should do more to bring…