Macro & Micro Economics — Basics
Understand how economic indicators and analysis types affect market moves like NASDAQ 100 and S&P 500.
Macroeconomic Indicators (Macro)
These reflect the overall economy. Examples:
CPI (Inflation)
High CPI → possible policy tightening.
FED Rates
Rate hikes → pricier capital/lower liquidity.
GDP (Growth)
Strong GDP → confidence/stock support.
Unemployment/NFP
Tight labor → potential inflation pressure.
➡️ Supportive macro (controlled inflation, balanced rates) tends to buoy NASDAQ 100/S&P 500; weak macro often weighs on valuations.
Microeconomic Factors (Micro)
These are company/sector specific:
EPS/Profitability
Rising profits → stronger stock/sector.
Supply Chain
Costs/shortages → margin pressure.
Demand
Strong demand → higher revenues.
Competition
Share & differentiation impact valuation.
➡️ Many positive micro prints across constituents can lift the broader index.
Technical vs Fundamental Analysis
Technical Analysis
- Charts, price patterns, volume.
- Indicators: MACD, RSI, Bollinger, EMA.
- Focus on timing/context for entries.
Fundamental Analysis
- Macro: CPI, rates, unemployment, GDP.
- Micro: EPS, costs, demand, competition.
- Focus on value, profitability, risk.
🔄 The combo is powerful: Tradinglex uses technical setups; you can enhance results with macro/micro context.
Tiny Glossary
CPI
Consumer Price Index (inflation gauge).
PCE
Personal Consumption Expenditures (FED’s preferred).
PMIs
Purchasing Managers’ Indexes (manufacturing/services).
NFP
Non-Farm Payrolls — labor market strength.
EPS
Earnings Per Share — key micro metric.
FCF
Free Cash Flow — earnings quality/liquidity.