Last week Fed Chair Powell held a press conference following the most recent FOMC meeting. He suggested that interest rates will stay at historic low levels into 2022, maybe longer. This notion sparked a decline in stocks and rise in the fixed income market. He also stated that the scheduled economic reports would have little if any impact because they would be unreliable due to the effects of the coronavirus. Yet on Tuesday of this week, the retail sales report was far stronger than anticipated and it did have a positive impact on stocks and negative influence on treasuries.  Obviously, the monthly economic events are likely to impact prices because consensus estimates are so far off. This is an issue with earnings estimates and guidance as well.

Over the years the regular economic reports have changed in rank of influence. This is a good time to get familiar with these reports and the dates they are released because they are bound to add volatility. I ranked them below in order of impact. The FOMC is data dependent, so we should monitor the events they scrutinize as well.

• Fed-FOMC announcements and the Beige Book
• Employment-Labor Department reports job data the first Friday of every month, ADP employment report first Wednesday of each month
• GDP 2 revisions-Gross Domestic Product is a measure of market value of goods and services
• ISM Services & Mfg-Institute of Supply Management measures economic activity in services, manufacturing and a composite of both
• Retail sales-also includes an ex-auto component
• Inflation-PCE core Personal Income Expenditure core is the Fed’s benchmark inflation gauge
• Consumer sentiment and confidence
• Industrial Production and Capacity Utilization is a percentage of factory operations
• Housing starts, permits, prices

Traders who are involved in the financial sectors and even some commodity markets should be aware of the data that may impact their positions. Thus, allowing them to hedge properly.

John Seguin, Market Taker Mentoring