What the FOMC minutes mean to you?

What the FOMC minutes mean to you?

Peter Buchsbaum Mortgage Banker Horsham PA

Market Focus: Can you say Federal Reserve? After a roller coaster ride back to where it all started last week this week is filled with lots of Fed Speak with very little in the way of reports. The Fed will have several different reads on the jobs report. Charles Ploser from Philadelphia will scream about inflation and Narayana Kocherlakota. Should be another up and down week.

Monday:

No Reports

Jack Lew (Treasury Secretary) Speaks

Esther George (Kansas City Federal Reserve President) Speaks

Tuesday:

Consumer Credit: The dollar value of consumer installment credit outstanding. Changes in consumer credit indicate the state of consumer finances and portend future spending patterns. The consensus estimate is for a decrease from 26 billion to 20 billion. What it means to you: Growth in consumer credit can hold positive or negative implications for the economy and markets. Economic activity is stimulated when consumers borrow within their means to buy cars and other major purchases. On the other hand, if consumers pile up too much debt relative to their income levels, they may have to stop spending on new goods and services just to pay off old debts. That could put a big dent in economic growth.

ICSC Goldman Store Sales: This weekly measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10 percent of total retail sales. What it means to you: Consumer spending accounts for more than two-thirds of the economy, so if you know what consumers are up to, you’ll have a pretty good handle on where the economy is headed.

Redbook: A weekly measure of sales at chain stores, discounters, and department stores. It is a less consistent indicator of retail sales than the weekly ICSC index. What it means to you: The pattern in consumer spending is often the foremost influence on stock and bond markets.

Narayana Kocherlakota (Minneapolis Federal Reserve President) Speaks

William Dudley (New York Federal Reserve President) Speaks

Wednesday:

FOMC Minutes: The Federal Open Market Committee issues minutes of its meetings with a lag. The minutes of the previous meeting are reported three weeks after the meeting. What it means to you: Investors who want a more detailed description of Fed opinions will generally read the minutes closely. However, the Fed discloses its official view at the end of each FOMC meeting with a public statement. Fed officials make numerous speeches, which freely give their views to the public at large.

EIA Petroleum Report: The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S. The level of inventories helps determine prices for petroleum products. What it means to you: Petroleum product prices are determined by supply and demand – just like any other good and service. During periods of strong economic growth, one would expect demand to be robust. If inventories are low, this will lead to increases in crude oil prices – or price increases for a wide variety of petroleum products such as gasoline or heating oil.

Charles Evans (Chicago Federal Reserve President) Speaks

10 Year Note Auction

Thursday:

Weekly Jobless Claims: New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. The consensus estimate is for an increase from 287,000 to 293,000. What it means to you: By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation threatens, it’s a good bet that interest rates will rise.

Chain Store Sales: Monthly sales volumes from individual department, chain, discount, and apparel stores are usually reported on the first Thursday of each month. Chain store sales correspond with roughly 10 percent of retail sales. Chain store sales are an indicator of retail sales and consumer spending trends. What it means to you: Just a few words of caution. Sales are reported as a change from the 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 are usually reported for “comparable stores” in case of company mergers. Chain store sales not only give you a sense of the big picture, but also the trends among individual retailers and different store categories. Perhaps the discount chains such as Target and Wal-Mart are doing well, but the high-end department stores such as Tiffany’s are lagging. Maybe apparel specialty retailers are showing exceptional growth.

Wholesale Trade: Wholesale trade measures the dollar value of sales made and inventories held by merchant wholesalers. It is a component of business sales and inventories. What it means to you: Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a slower rate of growth that won’t lead to inflationary pressures. Wholesale sales and inventory data give investors a chance to look below the surface of the visible consumer economy.

Bloomberg Consumer Comfort Index: A weekly, random-sample survey tracking Americans’ views on the condition of the U.S. economy, their personal finances and the buying climate. What it means to you: The pattern in consumer attitudes can be a key influence on stock and bond markets. Consumer spending drives two-thirds of the economy and if the consumer is not confident, the consumer will not be willing to spend. Confidence impacts consumer spending which affects economic growth.

Money Supply

30 Year Note Auction

James Bullard (St. Louis Federal Reserve President) Speaks

Jeffrey Lacker (Richmond Federal Reserve President) Speaks

John William (San Francisco Federal Reserve President) Speaks

Friday:

Import and Export Prices: Import price indexes are compiled for the prices of goods that are bought in the United States but produced abroad and export price indexes are developed for the prices of goods sold abroad but produced domestically. These prices indicate inflationary trends in internationally traded products. The consensus estimate is for export prices to rise -,1 after last month’s -.5% but import prices to be -.8% after last month at -.9%. What it means to you: Changes in import and export prices are a valuable gauge of inflation here and abroad. Furthermore, the data can directly impact the financial markets such as bonds and the dollar.

Treasury Budget: The U.S. Treasury releases a monthly account of the surplus or deficit of the federal government. Changes in the budget balance of the annual fiscal year (which begins in October) are followed as an indicator of budgetary trends and the thrust of fiscal policy. What it means to you: In addition to following the trend in the budget deficit or surplus, investors can gain valuable insight to the state of the economy by looking at the government’s tax receipts. Higher tax receipts lead to an improved deficit situation when economic conditions are strong; conversely, lower tax receipts reflect a sluggish economic environment.

Charles Ploser (Philadelphia Federal Reserve President) Speaks

Richard Fisher (Dallas Federal Reserve President) Speaks

Esther George (Kansas City Federal Reserve President) Speaks

Jeffrey Lacker (Richmond Federal Reserve President) Speaks

Allied Mortgage Group
Branch Manager
Licensed in PA & NJ | NMLS #133257
225 E. City Avenue
Suite 102
Bala Cynwyd, PA 19004
215 740 8999
Schedule a Consultation

0 Comments

Leave a reply