Fundamental Economic Data Reports: Medium Market Movers !!

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Durable Goods Orders

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Source: The Census Bureau of Department of Commerce.
News Data Report Announcement Time: 8:30 EST around the 26^th of the month (data for the prior month).

The durable orders release estimates the dollar volume of orders, shipments, & unfilled orders of durable goods (defined as those goods whose lifespan is three years or more). Orders are regarded and considered a leading trading indicator of manufacturing activity

Conference Board Consumer Confidence

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Source: The Conference Board.
News Data Report Announcement Time: 10:00 EST on the last Tuesday of the month (data for the current month).

Conference Board carries out a monthly survey of 5000 households to ascertain the level of consumer confidence. The report can occasionally be useful in predicting the sudden shifts in consumption patterns, though most small changes in the index are just noise. Only index changes of at least five points should be considered significant.

Industrial Production

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Source: Fed Reserve.
News Announcement Time: 9:15 ET around the 1fifth of the month (data for the month prior).

The index of Industrial Production is a fixed-weight measure of physical output of the factories in a country, mines, and utilities. Manufacturing production, the biggest constituent of the total, can be accurately predicted using total manufacturing hours worked from the employment report.

Initial Jobless Claims

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Source: The Employment & Training Administration of Department of Labor.
News Data Report Announcement Time: 8:30 EST each Thursday (data for the week ended prior Saturday).

Initial jobless claims measure and estimate the No. of filings/registrations for the state jobless benefits(the number of individuals out of jobs). This report provides a timely, but often misleading, indicator of the momentum of the economic environment, with increases (decreases) in claims potential signifying slowing (accelerating) job growth.

There are two other statistics in this report - the number of people receiving state benefits & the insured unemployment rate; neither is watched closely by the market. Some analysts track the number of individuals receiving and getting state benefits from month to month as a tutorial for job growth, though this series has got a poor track record in predicting the monthly employment report. The insured unemployment rate changes little on a weekly basis & is never a factor for the market.

International Trade

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Source: The Census Bureau & the Bureau of Economic Analysis of Department of Commerce.
News Data Report Announcement Time: 8:30 EST around the 20th of the month (data for two months prior).

The trade report is most widely watched for trends in the over-all trade balance. But trends in both exports & imports of goods & services bear watching as well. The export data in particular are important to watch for indications that a strengthening competitive position at home &/or strengthening economies over-seas are boosting U.S. Growth. Imports provide an indication of domestic demand, but given the severe lag of this report relative to other consumption indicators, it is not particularly very valuable for this purpose.

The volatility in the monthly trade balance can play a crucial role in GDP forecasts. Net exports are a relatively volatile constituent of GDP, & the FX trade report gives the only early clue to the net export performance each quarter.

Producer Price Index - PPI

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Source: Bureau of Labor statistics, U.S. Department of Labor.
News Data Report Announcement Time: Around the 11th of every month at 8:30 EST for the prior month.

The Producer Price Index estimates prices of goods at the wholesale level. There are 3 broad sub-categories within PPI: crude, intermediate, and finished. The market keeps track of the finished goods index most closely, as it represents prices for goods which are ready for sale to the end user.

University of Michigan Consumer Sentiment Index

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Source: The University of Michigan .
News Data Report Announcement Time: Preliminary: 10:00 ET on the second Friday of the month (data for current month); Final: 10:00 ET on the fourth Friday of the month (data for the current month).

The Michigan index is almost identical to the Conference Board Consumer Confidence index, though there are 2 monthly releases, a preliminary & final reading. Like the Conference Board index, it has two sub-indices - expectations & current conditions. The expectations index is a component of the Conference Board Leading Technical Indicators index.

Institute for Supply Management (ISM)

Institute for Supply Management - ISM - Formerly referred to as the NAPM. Change was effective in January 2002. ISM is a composite diffusion index of the national manufacturing conditions.

Readings above 50% indicate an expanding factory sector. Investors need to keep their tabs on the pulse and performance of the economic environment because it dictates how various types of investments will perform.

By tracking the economic date such as and like the ISM, investors will know what the economic environment is for the different markets. The ISM generates a thorough look at the manufacturing industry sector, how busy it is and where things are headed.

Since the manufacturing industry sector is a major source of cyclical variability in the economic environment, this report has a large influence on the markets. More than one of the ISM sub-indexes provides insight on commodity prices and clues regarding to the potential for developing inflation.

Federal Reserve keeps a close watch on this report which helps it to identify the direction of interest rates when inflation signals are flashing in these data.

Leading Indicators

Leading Trading Indicators - A composite index of 10 economic indicators which typically lead the overall economic activity.

Investors and Traders need to keep their tabs on the performance of the economic situation because it dictates how various different types of investments will perform.

By tracking economic data like the index of leading indicators, traders will know what the economic backdrop is for the various markets.

The index of Leading Indicators is designed to predict turning points in the economy like recessions & recoveries. Incidentally, stock prices are one of the leading technical indicators in this index.

Import and export prices

Import and export prices - The prices of goods that are brought into the United States of America but produced abroad & the market prices of goods sold abroad but produced locally and domestically.

These prices show inflationary trends in the internationally transacted products. Changes in import and export prices are a valuable measure of inflation here & abroad. Furthermore, the data can directly impact the financial markets like bonds and the dollar.

Inflation leads to higher interest rates and that’s bad news for stocks as well. By tracking inflation gauges such as and like import prices, traders can keep an eye on this menace to their investment portfolio.

IFO Business Climate in industry and trade

IFO Business Climate in industry & trade - IFO Business Climate Index is an early trading indicator for economic development in Germany. Every month the IFO Institute surveys more than 7,000 enterprises in west and east Germany on their appraisals of the business environment (good/satisfactory/poor) & their expectations for the next six months (better/same/worse).

The replies are weighted in accordance to the importance of the industry and aggregated. The percentage shares of the positive and negative responses to both questions are balanced & a geometric average is formed from the balances divided according to east and west Germany. The series of balances thus derived are linked to a base year (currently 1991) & seasonally adjusted.

APICS Survey

APICS Survey - Composite diffusion index of national manufacturing conditions. The APICS survey generates a thorough look at the manufacturing industry sector.

This survey is less well known that the ISM, but also can indicate trends in production. The diffusion index doesn't move in tandem with the ISM index every month, but sometimes the 2 do move in the same direction.

Since manufacturing is a major sector of the economy, traders can get a feel for the overall economic backdrop for various investments. An index level of 50 means no growth, but every 10 points signals gains of 4 % in manufacturing.

Beige Book

Beige Book - District banks have been printing out the summaries of the economic conditions in their districts since 1970. Initially this "Red Book" was prepared for policymakers only and wasn't intended for the public consumption.

It was made public in 1983. To mark this change, the color of the cover was changed & the publication became referred to as the Beige Book.

The Beige Book is released two weeks before each FOMC meeting eight times a year. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its district through reports from bank and branch directors and interviews with key businessmen, economists, market experts, & other sources.

The Beige Book summarizes this information by district and sector. An general summary of the 12 district reports is prepared by a designated Fed Reserve Bank on a rotating basis. The report is primarily seen as an indicator of how the Fed may act at its upcoming meeting.

Blue Book Report

Blue Book - A day after the green book, the FOMC members get the blue book. All blue books present the Board staff’s view of monetary and financial developments for the few months surrounding the meeting in question. Each book first reviews the recent developments in the policy variables, including the Federal Funds rate, reserve estimates, and the monetary aggregates. The blue book also presents two or three alternative policy scenarios for the upcoming inter meeting period. The blue books written for the February & July meetings contains 2 extra sections to assist and help the Committee in its presentation for the Humphrey-Hawkins testimony. The first of these sections provides longer-term simulations, covering the next five or six years. This section also provides estimates of how different assumptions about various factors/components like fiscal policy, the equilibrium unemployment rate, or the speed of adjustment to changed inflation expectations would affect the predicted outcome. The second additional section in the February and July blue books sets out alternative annual ranges for the growth of the monetary aggregates.

Red Book - Published every Tuesday, this report presents the detail sales of some 30 US stores produce the previous week & compared & analyzed to the previous month. It's always a forecast that counts for the request for the households but a rather volatile measure taking into consideration the more or less significant months for the detail business.

Business Inventories

Business Inventories - Dollar amount of inventories held by the manufacturers, wholesalers and retailers. The level of inventories in relation to sales is a crucial and important trading indicator of the near term direction of production activity.

Investors and Traders need to monitor the economic environment closely because it mostly dictates how various different types of investments will perform. Rising inventories can be an indication signal of business optimism that sales will be growing in the coming months.

By looking at and analyzing the ratio of the inventories to sales, investors can see whether the production demands will expand or contract in the near future. The business inventory information provide a valuable forward looking tool for tracking the economic environment.

Chain Stores Sales

Chain Stores Sales - Monthly sales volume from department, chain, discount and apparel stores. Sales are reported by the individual retailers. Chain store sales are an indicator of retail sales & consumer spending results.

Consumer spending contributes and accounts for two thirds of the economy, therefore if you know what the consumers are doing, you will have a pretty good handle on where the economic environment is headed.

Sales are reported as a change from same month a year ago. It is important to know how strong sales actually were a year ago to make sense of this year’s sales. In addition, sales usually are reported for "comparable stores" in the case of company mergers.

Consumer sentiment

Consumer sentiment - Survey of consumer attitudes concerning both the current situation as well as their expectations in regards to the economic conditions conducted by the University of Michigan.

5 hundred consumers are surveyed every month. Level of consumer sentiment is directly proportional to the power of consumer spending. Consumer spending contributes and accounts for a two thirds of the economy, so the markets are always dying to know what consumers are up to & how they might behave in the near future.

The more confident consumers are about the economy & their own personal finances, the more likely they're to spend. With this in mind, it’s easy to see how this index of consumer attitudes provides insight to the pulse of the economic environment.

Changes in consumer sentiment and retail sales don't move in tandem month by month.

Current account

Current account - Measure of the country’s international trade balance in goods, services and unilateral transfers. Level of the current trading account, and also the trends in exports and imports, are followed as indicators of the trends in the foreign trade.

U.S. Trade with foreign countries hold important clues to economic trends here & abroad. The data can directly impact all the financial markets, especially the value of the US Dollar.

Factory orders

Factory orders - Dollar level of new orders for manufacturing durable goods and nondurable goods. It provides more complete information than durable goods orders that are reported 1 or 2 weeks earlier in the month.

The durable goods orders information show how busy the factories will be in coming months as the manufacturers work to fill those orders. This report provides insight to the demand for not only hard goods like refrigerators and cars, but nondurables such as and like cigarettes & apparel.

In addition to new orders, analysts monitor unfilled orders, a trading indicator of the backlog in production. Shipments reveal current sales. Inventories give a handle on the power of current and future production.

All in all, this report tells traders what to expect from manufacturing industry sector, a major component of the economy & therefore a major factor of influence on their investments.

Green Book

Green Book - Green book is prepared by the staff members at the Board of Governors 5 days in advance of an FOMC meeting. It presents the staff’s interpretations on several economic and financial variables and is divided in to two parts.

The first part of the green book describes and interprets significant developments in the US Economic activity, prices, interest rates, flows of money & credit, and the international sector that have occurred in recent months or quarters.

This section also displays forecasts of a number of variables for the next 6 to 8 quarters. The second part of the green book provides additional information on recent developments.

It describes trends in employment, production, & prices and the factors and aspects influencing them. This section includes also sector by sector analyzes, commenting on such levels as housing, motor vehicle production, inventories, and spending by federal, state, & local governments.

It reviews a range and variety of developments in the domestic financial markets, including credit patterns for banks, other financial intermediaries, non-financial businesses, and consumers.

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Finally, international developments are reviewed & analyzed, with commentary on trade statistics, international financial transactions, markets, & economic activities in a number of foreign countries.

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