MoneySpeak: The Fluctuating Stock Market

Check out our chart of the ten most influential economic indicators and find out how and why they affect the market and your finances.

Each week brings a new batch of economic data: Interest rates are up, the consumer price index is down, etc. We know the news affects the stock market, but most of us aren't sure why.

These economic indicators are statistical snapshots that either report business and consumer spending patterns or predict if we'll spend more or less in the coming months.

Why should Wall Street care what we do on Main Street? "Consumer spending makes up two-thirds of the U.S. economy," says Jeremy Siegel, finance professor at the Wharton School and author of Stocks for the Long Run. "How we spend our dollars has a big impact on corporate profits."

We asked Professor Siegel to select the ten most influential indicators and explain how and why they affect the market. Sure, it's a fool's game to use this data to time individual investments, but you don't want to skip the business pages entirely. Refer to it next time the news turns to numbers.

Click here for the chart.

From Reader's Digest - March 2004

 

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