Not all economic indicators or market metrics are created equal. What counts changes with time and place.

Here's what matters this summer:

The Presidential Race Predictor

Who wins the election is important for the economy, but how can you evaluate the odds when the race between Democrat Hillary Clinton and Republican Donald Trump look tight?

There's a time-tested way.

Watch the S&P 500 closely, or failing that, the SPDR S&P 500 (SPY) - Get Report exchange-traded fund, which tracks the index.

If the index rises during the three months between July 31 and Oct. 31 then the incumbent's party wins 82% of the time, according to data going back to World War II, from S&P Global Market Intelligence. This year, that would mean Clinton.

If the index falls over the same period then the non-incumbent's party wins 86% of the time. In this case, that's Trump.

Watching the market may also give you an idea of which sectors will perform better during the president's term.

For instance, pharmaceutical companies may face heightened regulation under Clinton. Recall that she reacted harshly to news that pharma executive Martin Shkreli raised prices on a key drug by more than 5,000% overnight. Shkreli eventually backed down, lowering the price.

Still, more government oversight on pharmaceutical pricing could weigh on the VanEck Vectors Pharmaceutical (PPH) - Get Report ETF, which tracks a basket of drug companies.

On Trump's side, expect a likely boost to military spending, which would benefit companies like Lockheed Martin (LMT) - Get Report . He'll also likely be keen on much-needed infrastructure spending.

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"When he builds a road, it will be the best road in the world ever built because that's what he says about anything he ever does," jokes Peter Tanous, chairman of Washington D.C.-based Lynx Investment Advisory. "There will be lines around the block waiting to see it.

There is also growing bipartisan support for such spending in Congress. For that reason, companies supplying building materials, such as Vulcan Materials (VMC) - Get Report and Martin Marietta Materials (MLM) - Get Report , might be worth a look either way.

PCE, Not CPI

Watch what the Federal Reserve watches as a measure of inflation. Officials there seem to have cast aside the Consumer Price Index (CPI) in favor of the personal consumption expenditure (PCE) gauge. It's based on what people actually spend money on rather than the blunt CPI index.

The key is whether the PCE measure meets the Fed's goal of maintaining a 2% increase in the price level. That looks like it's going to happen, at least according to some observers.

"We project a year-over-year headline rate of 2.0% in December 2016, which could rise to as high as 2.5% in the first quarter of 2017," writes Omair Sharif, senior U.S. economist at Societe Generale, in a recent report.

The unknown part of the policy mix is whether Fed policy makers require a sustained period of 2% inflation to warrant increases to the short term cost of borrowing. I suspect that they will.

If the Fed communicates its intentions clearly, expect no abrupt bond market moves. But if it doesn't, then there could be severe volatility, which may spill into stocks.

Britain's Brexit

Britain's decision to exit the European Union might seem like a world away to U.S. investors. However, it matters greatly to Europe, and hence to America.

Already, the uncertainty has crushed sentiment in Germany, the EU's largest economy and the traditional growth engine on the continent.

The ZEW Indicator of Economic Sentiment for the Eurozone "plunged 34.9 points in July to -14.7 from June's 20.2 in reaction to the Brexit vote, the plunging pound, and late June's financial volatility," according to a recent report by Bill Adams, senior international economist at PNC Financial Services. The index matters because it's "closely watched as an early read on the economic outlook for the Eurozone."

Worse still for Germany (and the EU) is that British politicians are now trying to cut trade deals as fast as possible. So far, key countries said to show an interest include Japan, Canada, Australia, India, and even the Obama administration (which suggested 'back-of-the-line treatment for the UK.)

Britain imports way more from Germany than it exports to it. If Britain finds multiple new trade partners, expect Germany's exports to be hurt and its economy to suffer. German business leaders will be watching closely, and so should you.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.