In statistics , economics , and finance , an index is a statistical measure of change in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment. Economic indices track economic health from different perspectives. Examples include the consumer price index , which measures changes in retail prices paid by consumers, and the cost-of-living index (COLI), which measures the relative cost of living over time.
29-515: The U.S. Dollar Index ( USDX , DXY , DX, or, informally, the "Dixie" ) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies , often referred to as a basket of U.S. trade partners' currencies. The Index goes up when the U.S. dollar gains "strength" (value) when compared to other currencies. The index is designed, maintained, and published by ICE ( Intercontinental Exchange, Inc. ), with
58-654: A day on the ICE platform with futures having a March/June/September/December quarterly expiration cycle. It is also available indirectly in exchange-traded funds (ETFs), options, contracts for difference and mutual funds . Index number Influential global financial indices such as the Global Dow , and the NASDAQ Composite track the performance of selected large and powerful companies in order to evaluate and predict economic trends . The Dow Jones Industrial Average and
87-450: A drop in the dollar's value often results in higher commodity prices in the local currencies of developing countries. This increase in prices can enhance local income and consumption, leading to economic growth. On the other hand, when the USD strengthens, commodity prices generally decline, which can hinder growth in these regions. Consequently, the economic development cycle in developing nations
116-604: A percentage over or under the cost of a Big Mac in the U.S. in USD . Such indices can be used to help forecast currency values. An index number is an economic data figure reflecting price or quantity compared with a standard or base value. The base usually equals 100 and the index number is usually expressed as 100 times the ratio to the base value. For example, if a commodity costs twice as much in 1970 as it did in 1960, its index number would be 200 relative to 1960. Index numbers are used especially to compare business activity,
145-409: A wide range of circumstances. Some indexes are not time series. Spatial indexes summarize real estate prices, or toxins in the environment, or availability of services, across geographic locations. Indexes may also be used to summarize comparisons between distributions of data within categories. For example, purchasing power parity comparisons of currencies are often constructed with indexes. There
174-634: Is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange . Along with the Dow Jones Industrial Average and S&P 500 , it is one of the three most-followed stock market indices in the United States. The composition of the NASDAQ Composite is heavily weighted towards companies in the information technology sector. The Nasdaq-100 , which includes 100 of
203-426: Is a substantial body of economic analysis concerning the construction of index numbers, desirable properties of index numbers and the relationship between index numbers and economic theory. A number indicating a change in magnitude, as of price, wage, employment, or production shifts, relative to the magnitude at a specified point usually taken as 100. The index number problem is the term used by economists to describe
232-468: Is closely linked to the cycle of commodity prices, which is driven by fluctuations in the USD. The trade-weighted US dollar index is a currency index created by the Federal Reserve to measure the exchange rate of the United States dollar compared to the nations that it trades with the most, the more trade a country has with the United States the more that exchange rate weighs on the index. The index
261-512: Is described as the index number problem. There is no theoretically ideal solution to this problem. In practice for retail price indices, the "basket of goods" is updated incrementally every few years to reflect changes. Nevertheless, the fact remains that many economic indices taken over the long term are not really like-for-like comparisons and this is an issue taken into account by researchers in economic history . NASDAQ Composite The Nasdaq Composite ( ticker symbol ^IXIC )
290-461: The S&;P 500 primarily track U.S. markets, though some legacy international companies are included. The consumer price index tracks the variation in prices for different consumer goods and services over time in a constant geographical location and is integral to calculations used to adjust salaries, bond interest rates, and tax thresholds for inflation. The GDP Deflator Index, or real GDP, measures
319-414: The cost of living , and employment . They enable economists to reduce unwieldy business data into easily understood terms. In contrast to a cost-of-living index based on the true but unknown utility function, a superlative index number is an index number that can be calculated. Thus, superlative index numbers are used to provide a fairly close approximation to the underlying cost-of-living index number in
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#1732876172166348-413: The "basket" has been altered only once, when several European currencies were subsumed by the euro at the start of 1999. Some commentators have said that the make up of the "basket" is overdue for revision as China, Mexico, South Korea and Brazil are major trading partners presently which are not part of the index whereas Sweden and Switzerland are continuing as part of the index. Some scholars posit that
377-531: The Nasdaq Composite, a security's U.S. listing must be exclusively on the Nasdaq stock market unless the security was dually listed on another U.S. market prior to 2004 and has continuously maintained such listing, and must be one of the following security types: Closed-end funds , convertible bonds , exchange-traded funds , preferred stocks , rights, warrants , units and other derivatives are not included in
406-429: The U.S. dollar also correlates with global interest rates, particularly affecting borrowing costs for developing nations. When the USD depreciates, borrowing becomes cheaper and foreign investment increases. Conversely, USD appreciation raises interest rates , making borrowing more expensive and reducing the flow of foreign direct investment to these countries. Because most commodities are traded in U.S. dollars globally,
435-582: The cyclical fluctuations in the Dollar Index, commonly referred to as the Dollar Cycle, are intricately linked to economic growth trends in developing nations . According to this hypothesis, a period of appreciation in the dollar, known as a dollar upcycle, tends to correlate with a decline in economic growth in emerging markets. Conversely, a period of depreciation, or a dollar downcycle, is associated with an increase in growth within these economies. The value of
464-465: The highest point reached on the index since January 24, 2001, before falling in the United States bear market of 2007–2009 . By February 6, 2008, the index was trading below 2,300. On September 15, 2008, bankruptcy of Lehman Brothers led to a 3.6% drop in the index, its worst single-session percentage decline since March 24, 2003. On September 29, 2008, the index fell nearly 200 points or 9.14% to fall beneath 2,000. Conversely, on October 13, 2008,
493-411: The index closed above 5,000 for the first time since March 9, 2000. On April 23, 2015, the index set a new record closing high for the first time in 15 years, though it was still just short of the all-time intraday high set in 2000. On January 2, 2018, the index crossed 7,000 intraday. By December 24, 2018, the index had plunged to its yearly low at 6,192. In 2019, the index rose 35.2%, closing for
522-417: The index gained nearly 200 points, more than 11%. On March 9, 2009, the index reached a six-year intra-day low of 1,265.52. The index closed 2012 at 3,019.51. On November 26, 2013, the index closed above 4,000 for the first time since September 7, 2000. Although it still stood almost 20% below its all-time highs, the index set a new record annual close of 4,176.59 on December 31, 2013. On March 2, 2015,
551-400: The index peaked at 5,132.52, but fell 78% from its peak by October 2002. The index declined to half its value within a year, and finally hit the bottom of the bear market trend on October 10, 2002, with an intra-day low of 1,108.49. It remained down at least 50% until May 2007. The index closed above 2,800 on October 9, 2007, and reached an intra-day level of 2,861.51 on October 31, 2007,
580-420: The index. If at any time a component security no longer meets the required criteria, the security is removed from the index. The index was launched in 1971, with a starting value of 100. On July 17, 1995, the index closed above 1,000 for the first time. Between 1995 and 2000, the peak of the dot-com bubble , the Nasdaq Composite stock market index rose 400%. It reached a price–earnings ratio of 200, dwarfing
609-402: The largest non-financial companies in the Nasdaq Composite, accounts for about 80% of the index weighting of the Nasdaq Composite. The Nasdaq Composite is a capitalization-weighted index ; its price is calculated by taking the sum of the products of closing price and index share of all of the securities in the index. The sum is then divided by a divisor which reduces the order of magnitude of
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#1732876172166638-478: The level of prices of all-new, domestically produced, final goods and services in an economy. Market performance indices include the labour market index / job index and proprietary stock market index investment instruments offered by brokerage houses . Some indices display market variations. For example, the Economist provides a Big Mac Index that expresses the adjusted cost of a globally ubiquitous Big Mac as
667-465: The limitation of statistical indexing, when used as a measurement for cost-of-living increases. For example, in the Consumer Price Index, a reference year's "market basket" is assigned an index number of 100. In 2019 if a market basket price is 55 and the basket were to double the following year, in 2020, then the index would rise to 200. This is done by performing a simple calculation: Dividing
696-572: The name "U.S. Dollar Index" a registered trademark . It is a weighted geometric mean of the dollar's value relative to following select currencies: USDX started in March 1973, soon after the dismantling of the Bretton Woods system . At its start, the value of the U.S. Dollar Index was 100.000. It has since traded as high as 164.7200 in February 1985, and as low as 70.698 on March 16, 2008. The make up of
725-457: The new year market basket price by the reference year's (otherwise known as the base year) price, and subsequently multiplying the quotient by 100. While the CPI is a conventional method to measure inflation, it doesn't express how price changes directly affect all consumer purchases of goods and services. It either understates or overstates cost-of-living increases. This is the limitation of the CPI that
754-698: The peak price–earnings ratio of 80 for the Japanese Nikkei 225 during the Japanese asset price bubble of 1991. In 1999, shares of Qualcomm rose in value by 2,619%, 12 other large-cap stocks each rose over 1,000% in value, and seven additional large-cap stocks each rose over 900% in value. Even though the Nasdaq Composite rose 85.6% and the S&P 500 Index rose 19.5% in 1999, more stocks fell in value than rose in value as investors sold stocks in slower growing companies to invest in Internet stocks. On March 10, 2000,
783-555: The result. Index funds that attempt to track the Nasdaq Composite include Fidelity Investments ' FNCMX mutual fund and ONEQ exchange-traded fund . Invesco offers the Nasdaq: QQQ exchange-traded fund , which matches the performance of the Nasdaq-100 , a different index which tracks 100 of the largest non-financial companies in the Nasdaq Composite and is 90% correlated with the Nasdaq Composite. To be eligible for inclusion in
812-582: The year at 8,972.60 points. During the 2020 stock market crash , on March 23, 2020, the index hit a low of 6,860. However, on June 9, 2020, the index traded above 10,000 for the first time. On August 6, 2020, the index reached a new all-time high above 11,000 and managed to close for the year at 12,888 points. In 2021, the index reached the milestones of closing above 13,000 and 14,000 in January and February respectively, and in November it closed above 16,000 for
841-602: Was created in 1998 during the creation of the Euro . ICE provides live feeds for Dow Futures that appear on Bloomberg.com and CNN Money . USDX is updated whenever U.S. Dollar markets are open, which is from Sunday evening New York City local time (early Monday morning Asia time) for 24 hours a day to late Friday afternoon New York City local time. The U.S. Dollar Index is calculated with this formula: USDX = 50.14348112 × EURUSD × USDJPY × GBPUSD × USDCAD × USDSEK × USDCHF US Dollar Index futures are traded for 21 hours
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