65. Trading the News - Economic Numbers - Retail Sales
A look at how the make up of the Retail Sales number and how this economic indicator moves the stock, futures, and forex markets. Example Release: http://www.census.gov/svsd/www/marts_... Lesson on InformedTrades.com: http://www.informedtrades.com/15297-t... The retail sales number is released at 8:30 am on or around the 13th of each month, and is an estimate of the sales of goods by all retail establishments in the United States. These goods fall into the personal consumption expenditures category, which as we discussed in our lesson on GDP, makes up over 65% of the US Economy. Although the number does not include anywhere near the data that is included in GDP, since this number is released for each month (where GDP is released for each quarter) it is closely watched by the Fed and other market participants as a timelier indicator of what is happening with the consumer. In addition to the widely reported headline number, the report that is issued along with the retail sales number includes a breakdown of retail sales growth by category. With this in mind the report is not only a good indicator of overall consumer activity, but also for how different parts of the economy such as automobile, restaurant, clothing and electronics sales are fairing. If you are trading the stock of a company which sells products related to one of the categories reported in the retail sales release, then it is obviously important to understand that what happens with the growth of that category is most likely going to have a direct affect on the price of the stock that you are trading.
#
howto
#
trade
#
Retail
#
Sales
#
Finance
#
economy
#
fundamental
#
analysis
#
investing
#
forex
#
futures
#
stockmarke
Canales:
Educación
Inversiones & Trading
Agregado: 550 days ago por
PFISPAIN
Tiempo: 01:00 |
Vistas: 131 |
Comentarios: 0
Not yet rated
64. Trading the News - Non Farm Payrolls (NFP's)
A lesson on Non Farm Payrolls and what traders need to watch for when trading and investing in the futures, forex, and stock markets. Link to the BLS NFP Data Section: http://www.bls.gov/ces/#news Link to this lesson on InformedTrades.com: http://www.informedtrades.com/15030-t... As there are so many things which can be measured in an economy, there are tons of economic releases every month, with new numbers coming out on almost a daily basis. With all this data it is easy to get overwhelmed when looking at the economic calendar and trying to determine what is important to us as traders. While the importance of different economic indicators to the markets changes depending on current economic conditions, there are approximately 10 major economic indicators that have and always will be important to the market. Most of the other data that is reported throughout the month is similar to one of these 10 indictors, so once we have an understanding of the main numbers everything else will make a lot more sense. Before getting started here it is important to understand that economic releases are designed to try and give a picture of either: 1. What has already happened in the economy based on past numbers (referred to as a lagging indicator) 2. What is anticipated going forward based on past numbers. (referred to as a leading indicator) 3. What is happening right now based on current data. (referred to as a coincident indicator) Economic indicators are designed to try and give a picture of the growth the economy is experiencing, the level of price increases or inflation that the economy is experiencing, or both. One of the most important and therefore market moving economic numbers after GDP is the Non Farm Payrolls (NFP), which is released at 8:30 am on the first Friday of each month. Released by the Bureau of Labor Statistics the Non Farm Payrolls Number is meant to represent the number of jobs added or lost in the economy over the last month, not including jobs relating to the Farming industry. The Farming Industry is not included because of its seasonal hiring which would distort the number around harvest times as farms add workers and then release them after the harvest is complete for example
#
howto
#
trade
#
NFP
#
Non
#
Farm
#
Payrolls
#
economy
#
fundamental
#
analysis
#
investing
#
forex
#
futures
#
stockma
Canales:
Educación
Inversiones & Trading
Agregado: 550 days ago por
PFISPAIN
Tiempo: 01:00 |
Vistas: 295 |
Comentarios: 0
Not yet rated
63. Trading the News - Economic Numbers - GDP Part 2
The second lesson in a series on trading and how the components which make up the Gross Domestic Product number affect the stock, futures, and forex markets. Link to this lesson on InformedTrades.com: http://www.informedtrades.com/14918-t... In addition to looking at the growth or lack thereof in the overall GDP number, traders will also look at the growth or lack there of in the different components that make up the number. As GDP represents the value of everything in an Economy you can imagine the amount of data that goes into compiling the number, much of which is published for market participants to view. By looking at the different pieces which make up GDP we can get a good picture of what is happening not only with the overall economy but with all the different components of the economy which are reported on to come up with the final number. . Now we could spend many lessons going over all the data that is in this report. The goal here however is to build a framework for understanding the major components so we as traders can understand what is going on when the market reacts to certain pieces of the report and will recognize when to dig deeper for more information on what is happening in a certain sector. The broad categories that it is important to have an understanding of are: 1. Personal Consumption Expenditures -- as over 65% of the US economy is made up of this category, what the individual consumer is doing ie the growth or lack thereof in their consumption, as well as on what goods and services they are spending their money on is heavily focused on. 2. Private Investment - This includes purchases of things such as computers, equipment and inventories (known as fixed assets) by businesses, purchases of homes by individuals, and of businesses investing in inventories of goods to sell. These are all obviously important things, as how much businesses are investing is a good indication of how they feel about future growth prospects, and how much growth the housing market is experiencing is also an important component of the economy. 3. Government Spending -- this includes pretty much everything the government spends money on besides social programs. 4. Exports -- Imports -- an important number which shows how wide the gap is between how much the country exports and how much it imports. What the GDP number is going to give you a feel for is how much each of the above grew for the quarter and what their overall contribution to the economy was. The above numbers will then be broken down into more detailed numbers which go into compiling the final number for the above 4 categories.
#
howto
#
trade
#
GDP
#
Gross
#
Domestic
#
Product
#
economy
#
fundamental
#
analysis
#
investing
#
forex
#
futures
#
st
Canales:
Educación
Inversiones & Trading
Agregado: 550 days ago por
PFISPAIN
Tiempo: 01:00 |
Vistas: 130 |
Comentarios: 0
Not yet rated
62. Trading the News - Economic Numbers - GDP Part 1
A lesson on what traders of the stock, futures, and forex markets look for when the Gross Domestic Product (GDP) Number is released. As we have learned in previous lessons there are many components of the US Economy which can affect overall economic growth and inflation expectations. Some of the major examples here are how many people are employed in the economy vs. unemployed, how much the housing market is growing in different parts of the country, and at what rate the prices for different products in the economy are seeing increases. As all of these things are so important to the economy and therefore to the markets, there are no shortage of economic reports which are released to try and help people gauge how things are going with different pieces of the economy. It is important for us as traders to understand the major reports here as even if we are trading off of technicals, understanding what is happening in the market from a fundamental standpoint can help establish a longer term bias for trading. In the short term an understanding of these numbers will also help to assess the erratic and sometimes extreme movements which can occur after economic releases. The granddaddy of all economic reports is the release of the Gross Domestic Product (GDP) number for the economy. The Gross Domestic Product for the US or any other country is the final value of all the goods and services produced in that economy. Essentially what you get after calculating GDP by adding up the value of all goods and services produced in the economy is a measure of the size of the overall economy. It is for this reason that market participants will watch the GDP number closely as the rate of growth in this number represents the rate of growth in the overall economy. As a side note here, GDP also allows a comparison to be made of the sizes of different economies from around the world, as well as their growth rates. To give you an idea of just how large the US Economy is, 2007 GDP for the United States was estimated at 13.7 Trillion dollars. This is in comparison to the next largest economy in the world, Japan which has a GDP of under 5 Trillion Dollars. Quarterly estimates of GDP are released each month with Advance Estimates which are incomplete and subject to further revision being released near the end of the first month after the end of the quarter being reported. In the second month after the end of the quarter being reported preliminary numbers (which basically means more accurate than advanced) normally are released and then finally the final GDP number is released at the end of the 3rd month after the end of the quarter being reported on. Traders are going to focus heavily on the growth rate released in the Advanced number and markets will also move on any significant revisions made in the preliminary and final GDP numbers.
#
howto
#
trade
#
GDP
#
Gross
#
Domestic
#
Product
#
economy
#
fundamental
#
analysis
#
investing
#
forex
#
futures
#
st
Canales:
Educación
Inversiones & Trading
Agregado: 550 days ago por
PFISPAIN
Tiempo: 01:00 |
Vistas: 162 |
Comentarios: 0
Not yet rated
60. How to Determine When the Fed is Going to Change Rates
A lesson on monetary policy and how to determine when the federal reserve is going to raise or lower interest rates for active traders and investors in the stock, futures, and forex markets.
#
howto
#
trade
#
interestrates
#
economy
#
fundamental
#
analysis
#
investing
#
business
#
forex
#
futures
#
stockmarke
Canales:
Educación
Inversiones & Trading
Agregado: 550 days ago por
PFISPAIN
Tiempo: 01:00 |
Vistas: 117 |
Comentarios: 0
Not yet rated
59. How the Fed Changes Interest Rates
A lesson on open market operations and how the federal reserve increases and decreases the money supply in order to move interest rates and what this means for traders of the stock, futures, and foreign exchange markets. In our last lesson we looked at the structure of the Federal Reserve and the components of the FOMC, the portion responsible for implementing Monetary Policy. Now that we have an understanding of this, we can look further into exactly how monetary policy is facilitated and what happens to markets under differing scenarios. Monetary Policy very simply is anything which relates to action by the Federal Reserve to influence the amount of money and credit available in the economy. To understand exactly what this means, one first must understand the concept of fiat monetary systems. Fiat Monetary Systems: The United States, like most major economies, has what is known as a fiat monetary system. A Fiat Monetary system very simply is any system which uses a monetary unit (in this case the US Dollar) which is not convertible to some commodity, in general a precious metal such as gold. Fiat money, is money that is backed by the credit of some entity, normally a government, and the value for which is derived from its relative scarcity and the faith placed in it by the population which uses it. This is important to us as traders because the fact that the Dollar is not convertible to a commodity such as gold gives the Federal Reserve the ability to increase or decrease the money supply as it sees fit, or in other words to enact Monetary Policy. With this in mind the 3 tools available to the Fed for enacting monetary policy are: • Open Market Operations • The Discount Rate • Reserve Requirements The most common tool that the Fed uses, and therefore the one that we will cover, is Open Market Operations. Once we have an understanding of this and how increases or decreases in the supply of money affect demand and prices, the other two less commonly used tools will be more easily understood. Through something which is known as the Open Market Committee, the Fed increases and decreases the supply of money by buying and selling US Government securities. When The Fed wishes to reduce interest rates they will increase the supply of money by buying government securities using money that was not available in circulation before they made their purchase. As with anything, when additional supply is added and everything else remains constant, price normally falls. In this case the price that we are referring to is the cost of borrowing money or interest rates. Conversely, when the fed wishes to increase interest rates they will instruct the open market committee to sell government securities thereby taking the money they earn on the proceeds of those sales out of circulation and reducing the money supply.
#
howto
#
trade
#
trading
#
economy
#
fed
#
federalreserve
#
daytrade
#
investing
#
business
#
forex
#
futures
#
stockma
Canales:
Educación
Inversiones & Trading
Agregado: 550 days ago por
PFISPAIN
Tiempo: 01:00 |
Vistas: 122 |
Comentarios: 0
Not yet rated