Economically Speaking

How do I know when these events are taking place you might ask? Go to Forex Factory, Yahoo Finance, your broker. The US stock market is the most traded market due to the large number of listed stocks followed by Bombay, Canada, Frankfort and London.

Economic reports make up a large portion of the news. Many other countries have similar economic reports as the USA and those can influence the US markets as well that country’s market.

Core producer price index (Core PPI) is measurement of prices assessed by producers on services and goods, but excluding those items that fall into the food and energy category.PPI is precursor to the CPI and includes food and energy categories. This report is released around the 11th of each month at 8:30 ET for prior month in the USA.

Consumer Confidence= This is a survey that measures how optimistic or pessimistic consumers are with respect to the economy soon. The idea is that if the consumers are optimistic, they will tend to purchase more services and goods. The increase in spending will inevitably stimulate the whole economy.

Monetary Policy Statement = This report contains the outcome of the Central Bank’s decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it projects the economic outlook and offers clues on the outcome of future rate decisions.
In the US, this is the FOMC (Federal Open Market Committee) report. There are eight regularly scheduled FOMC meetings during the year to set key interest rates, such as the discount rate and to decide about decreasing or increasing money supply.
Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of services and goods. The meetings of the committee, which are secret, are the subject of much speculation on Wall Street, as analysts try to guess whether the Fed will loosen the money or tighten supply.

Let’s look at some of the more watched economic reports and begin to get an understanding of these.

Unemployment Rate/ Jobless Claim/ Initial Claim= This report is the number of individuals who filed for unemployment insurance for the first time during the past week. This report is released weekly, 5 days after the weekends.

Economic reports make up a large portion of the news. Many other countries have similar economic reports as the USA and those can influence the US markets as well that country’s market. Retail Sales = The retail sales report captures in-store sales as well as catalog and other out-of-store sales. Unemployment Rate/ Jobless Claim/ Initial Claim= This report is the number of individuals who filed for unemployment insurance for the first time during the past week. Non Farm Payroll= Reported by the U.S. Bureau of Labor -which represent the total number of paid U.S. workers of any business, excluding general government employees, private household employees, employees of nonprofit organizations that provide assistance to individuals and farm employees.

Non Farm Payroll= Reported by the U.S. Bureau of Labor -which represent the total number of paid U.S. workers of any business, excluding general government employees, private household employees, employees of nonprofit organizations that provide assistance to individuals and farm employees. Reported FIRST FRIDAY of each month.

Retail Sales = The retail sales report captures in-store sales as well as catalog and other out-of-store sales. The report also breaks down sales figures into groups such as food and beverages, clothing, and autos.

GDP = The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country’s economy. A significant change in GDP, whether up or down, usually has a significant effect on the stock market. In the USA, this report is released the fourth or third week of the month at 8:30 ET for the prior quarter.

CPI/ Core CPI= (The Consumer Price Index) Core CPI shows change in the price of services and goods purchased by consumers, excluding food and energy. CPI report includes food and energy.