Assessment of the relationship between macroeconomic indicators and stock profitability in Europe countries

Abstract

One of the most important components of the financial market is the stock market, which is closely related to the country’s economy. Currently, financial markets are developing rapidly, various financial products and investing in them are becoming more and more accessible, so this topic is relevant and often analyzed in scientific literature. Over the past year, the relationship between stock prices and macroeconomic indicators has become one of the most debated subjects among economic specialists, financial experts and politicians. By carrying out various studies, the aim is to determine what the stock price fluctuations depend on, what factors determine the profitability indices of the shares quoted on the stock exchanges. In this article, special attention is paid to the analysis of previously conducted scientific research, to the identification of factors determining the profitability of stocks. The purpose of the ongoing research is to analyze the impact of macroeconomic indicators on stock prices and to empirically assess their significance and influence on the profitability of stocks in selected countries. The CRITIC method of determining the significance of criteria and the multi-criteria assessment method TOPSIS were used to conduct the research. Weights were assigned to the selected evaluation criteria (macroeconomic indicators), then a ranking of 8 European countries whose shares are listed on the Nasdaq stock exchange was performed.