Gross Domestic Product: (GDP)
GDP represents the monetary value of goods produced during a specific period in the economy.Expect this data released the last business day of every month. GDP indicates the pace at which the economy is growing.In the GDP,you'll find numbers for consumer spending,private domestic investment,government public spending and the net exports and it includes all information about labor and property involving business activities.
If GDP fails to meet expectations set by the analysts or exceeds market expectations,stock prices will be affected at least temporarily.
Consumer Price Index: (CPI)
CPI measures the cost of a representative basket of goods and services,including food, energy, housing, clothing,transportation,medical care,entertainment and education.The financial markets,in general, look for a rate of increase in the range of 1% to 2%; anything higher may be a sign of inflation and can cause at least a temporary shock to the stock prices.
Producer Price Index: (PPI)
This is a collective data full of other indexes that affect domestic producers,including goods manufacturing,fishing and agricultural and other commodities.The labor department collect more than 100,000 prices each month from 30,000 production and manufacturing firms to calculate this data.This gives traders clues about what to expect in the next CPI release.
Retail sales data:
Tracks information about retail sales by large corporations and by small retail outlets.This data is particularly important whenever you're trading stocks in the retail sector.The surveyed number changes from month to month.When the number is negative,it means sales levels decreased from previous month.
Jobless claims:
The employment situation summary,is one of the most important leading indicators to watch.This rport is released every month and this sets the expectations for the rest of the reports that month.For example,signs of a weak labor market indicates poor retail sales,and expect housing starts also negative.This also can send shock waves through the financial markets and thus affect CPI,PPI reports.On the other hand,stock prices can rise dramatically whenever the report indicates better than expected numbers.
The two key parts of the report that traders need to watch are-
1.Unemployment and new jobs created
2.Average weekly hours worked and average earnings.
Consumer Confidence Index: (CCI)
This is another key report to watch.When consumer confidence is high,they are more likely to spend, automatically the financial and retail sectors will improve and results in higher stock prices.This index is compiled through a sampling of 5000 households and is most accurate indicator of consumer confidence. When confidence is trending lower,the Fed is more likely to cut interest rates.Similarly, a rapidly rising trend in CCI can lead the Fed to raise interest rates to cut off inflation;a rise in interest rates can send stock prices lower.
OK,now we knew all the economic indicators and reports,here is your question...what do you do now?
Here are the tasks you need to do-
1.Maintain the calender of the release dates for the economic indicators.
2.Know the parts of the economy that are most impacted by these indicators.
3.Know which economic indicators are most important for the time you are entering into the market.
4.Monitor the trends and get the idea of in which direction market is moving.
See you with next post...
GDP represents the monetary value of goods produced during a specific period in the economy.Expect this data released the last business day of every month. GDP indicates the pace at which the economy is growing.In the GDP,you'll find numbers for consumer spending,private domestic investment,government public spending and the net exports and it includes all information about labor and property involving business activities.
If GDP fails to meet expectations set by the analysts or exceeds market expectations,stock prices will be affected at least temporarily.
Consumer Price Index: (CPI)
CPI measures the cost of a representative basket of goods and services,including food, energy, housing, clothing,transportation,medical care,entertainment and education.The financial markets,in general, look for a rate of increase in the range of 1% to 2%; anything higher may be a sign of inflation and can cause at least a temporary shock to the stock prices.
Producer Price Index: (PPI)
This is a collective data full of other indexes that affect domestic producers,including goods manufacturing,fishing and agricultural and other commodities.The labor department collect more than 100,000 prices each month from 30,000 production and manufacturing firms to calculate this data.This gives traders clues about what to expect in the next CPI release.
Retail sales data:
Tracks information about retail sales by large corporations and by small retail outlets.This data is particularly important whenever you're trading stocks in the retail sector.The surveyed number changes from month to month.When the number is negative,it means sales levels decreased from previous month.
Jobless claims:
The employment situation summary,is one of the most important leading indicators to watch.This rport is released every month and this sets the expectations for the rest of the reports that month.For example,signs of a weak labor market indicates poor retail sales,and expect housing starts also negative.This also can send shock waves through the financial markets and thus affect CPI,PPI reports.On the other hand,stock prices can rise dramatically whenever the report indicates better than expected numbers.
The two key parts of the report that traders need to watch are-
1.Unemployment and new jobs created
2.Average weekly hours worked and average earnings.
Consumer Confidence Index: (CCI)
This is another key report to watch.When consumer confidence is high,they are more likely to spend, automatically the financial and retail sectors will improve and results in higher stock prices.This index is compiled through a sampling of 5000 households and is most accurate indicator of consumer confidence. When confidence is trending lower,the Fed is more likely to cut interest rates.Similarly, a rapidly rising trend in CCI can lead the Fed to raise interest rates to cut off inflation;a rise in interest rates can send stock prices lower.
OK,now we knew all the economic indicators and reports,here is your question...what do you do now?
Here are the tasks you need to do-
1.Maintain the calender of the release dates for the economic indicators.
2.Know the parts of the economy that are most impacted by these indicators.
3.Know which economic indicators are most important for the time you are entering into the market.
4.Monitor the trends and get the idea of in which direction market is moving.
See you with next post...
No comments:
Post a Comment