What Is Global Macro?
Wall Street professionals often refer to global macro, but few outside of the finance world have any idea what it means or why it matters to investors. Global macro is a term for underlying trends that are so large that they could lift or drop the economy or vast chunks of the securities market, says Peter Tchir, head of global macro at New York-based Academy Securities. As a whole, they are huge driving factors, he says. They differ from micro factors, which may affect the performance of a single company or subsector of the market. Mr. Tchir sees three major macro trends that will drive the global economy and the stock market in the near term: inflation, taxes and how the focus on environmental, social and governance practices could change Western companies relationships with China.  Inflation: What is going to drive everything is inflation, Mr. Tchir says. Inflation jumped to an annualized rate of 4.2% in April, up from 0.1% in May 2020, when inflation was at its lowest level since 2015, according to U.S. government data collated by TradingEconomics.com, a financial website. Some analysts see the trend continuing.