How Do You Analyze The Stock Market?
The stock market is influenced by several factors including the economy at large, current events, regulatory decisions and investor perceptions. It can be difficult to sort out what factors are influencing the market and individual companies within it. By examining the market from the top down you can start to understand the interrelation of these factors. Look at the economy as a whole to get the big picture. The economy underlies everything the stock market does. By understanding the macroeconomic view you can get an idea of trends in the market. Start by looking at the Gross Domestic Product growth rate to see how fast the economy is growing. Look up current rates of inflation to see how much a dollar today will be worth tomorrow. Inflation is tracked with indexes such as the Consumer Price Index and Producer Price Index. Research other economic data such as job growth statistics and reports from the Federal Reserve. The Federal Reserve Board regulates banks, controls inflation and
