Posts Tagged ‘forecast’

Economic Indicators – Leading the World Part 2

Hello Friends here we come up with an extension of our previous blog, ECONOMIC INDICATORS… “Leading the World” Part 1.

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Economic Indicators - Leading the World Part 2

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In previous Blog, we had touched upon the aspect like

what are Economic Events & Indicators and important sources of data provider for calculating & determining economic indicators.

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However in this Blog, we would try to know about the classified categories of Economic indicators in details and what is Time Era.

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Classified Categories:

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1. Leading indicators:

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These indicators are to forecast trends of the overall economy.

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The indicators included in the figure are:

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interest rate spread, M2 money supply, average manufacturing work week,

manufacturers’ new orders, S&P 500, average weekly unemployment claims,

vendor performance, housing permits, consumer expectations and

manufacturer’s new orders for non-defense capital goods.

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2. Lagging indicators:

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An indicator to generate transaction signals or to confirm the strength of a given trend.

It is a measurable economic factor, for example, corporate profits or unemployment that changes after the economy has already moved to a new trend.

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3. Coincident indicators:

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It provides information on the current state of the economy.

For example, coincident indicators move up when GDP is growing and down when GDP is shrinking.

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This indicator varies directly with, and at the same time as, the related economic trend.

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The four economic statistics comprising the Index of Coincident Economic indicators are

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– Number of employees on non-agricultural payrolls,

– Personal income less transfer payments,

– Industrial production,

– Manufacturing and

Trade sales.

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Time Era:

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Knowing when each piece of information will be released is important to successful trading.

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The economic calendars are found on many websites.

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These figures helps to decide how to trade using these events, it can help explain unanticipated price actions during those periods.

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These indicators play a vital role in determining the trend or movement of the stock market & the commodities futures.

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It has been seen many times that when a positive data of these indicators like GDP or Industrial Production comes into picture & looks promising,

the trade of currencies like Euro, USD, INR; precious metals like Gold, Silver, base metals of Copper, Zinc, Lead show a positive move & short-term rally immediately.

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Stay Tuned for more and more on this 🙂

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However For More latest Industry,Stock Market and Economy News Updates, Click Here

ECONOMIC INDICATORS… “Leading the World” Part 1

Hello Friends here we come up with our another write up on “SMC Gyan Series”.

 

Topic is ECONOMIC INDICATORS… “Leading the World”.

Here, we would go through the Brief of like what are Economic Events & Indicators and important sources of data provider for calculating & determining economic indicators.

🙂

 

ECONOMIC INDICATORS… “Leading the World”

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Economic Events & Indicators are statistics that precede an economic event.

 

The goal is to track the economy & derive a forecast for future performance.

 

Economic indicators have tremendous potential to generate volume and to move prices of commodities futures as well as the financial markets including Forex.


Tools of Construction: This would include separate sections of statistical methods including

– Calculating indices and re-basing them,

– Differences between arithmetic and geometric averages,

– Standard deviations,

– Regression analysis,

– Correlation and causation,

– Margins of error in statistics calculations and

– What this means for interpretation, subsequent revisions and why they happen.

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Economic indicators include various indices, earnings reports, and economic summaries.

 

Examples : unemployment rate,  housing starts,  Consumer Price Index (a measure for inflation),  Consumer Leverage Ratio,  industrial production,  bankruptcies,  Gross Domestic Product,  broadband internet penetration,  retail sales,  stock market prices,  money supply changes etc;

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The important sources of data provider for calculating & determining economic indicators are like:

– Bureau of Labor Statistics,

– Census of Construction Industries,

– Bureau of Economic Analysis &

– Reserve Bank.

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The value of the indicator data is considered important if it presents new information, or is instrumental to drawing conclusions which couldn’t be drawn under other reports or data.

 

Each indicator is marked with “H”-“M”-“L” (High-Medium-Low), according to its level of importance, as commonly considered.

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Next Blog we would try to know about the classified categories of Economic indicators in details and what is Time Era.

Stay Tuned for more and more on this 🙂

 

However For More latest Industry,Stock Market and Economy News Updates, Click Here

US Economists feel Positive, says Worst is Behind :)

Worst is behind :)

Among the world’s large economies, UK, which is the seventh largest and Italy, the tenth, remain in recession, like the US.

The UK economy shrunk 0.8% in the second quarter, while Italy’s was down 0.5%.

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Unlike in the UK, however, economists in the US believe the worst may be behind them.

‘‘It’s quite possible, though not certain, that retrospectively, we’ll say that the recession ended in July or August, may be September,’’ Nobel laureate Paul Krugman was quoted as saying.

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There is evidence that his is not undue optimism.

The pace of job losses in the US slowed more than forecast in July and the unemployment rate dropped for the first time in more than a year.

US GDP also shrank by just 0.3% (equivalent to an annualized 1%) in the seconnd-quarter after a 6.4% drop in the previous three months.

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That explains why US Federal Reserve is willing to bet that the nosedive the economy had witnessed in recent months is behind it.

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Over the last two years, the US has witnessed its worst financial crisis in decades, but that could be ending, which is good news for the world since it accounts for a fifth of global GDP.

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France and Germany also announced unexpected returns to the growth path, which means that four of the world’s five largest economies and six of the top 10 are now not in recession.

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Adding to the sense of optimism, the US Federal Reserve left rates unchanged, saying that the world’s largest economy was showing signs of levelling out.

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Among the five largest economies of the world, measured in purchasing power parity (PPP) dollars — which is more of an apples to apples comparison — China and India are already growing at healthy rates, although lower than their own pace for the last few years.

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Japan too has climbed out of recession and so has Germany.

These economies and the US account for 47% of world GDP in PPP terms.

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Among the world’s other large economies, Brazil is also now no longer in recession having grown by 1.5% in the second quarter.

Among the world’s large economies, UK, which is the seventh largest and Italy, the tenth, remain in recession, like the US. The UK economy shrunk 0.8% in the second quarter, while Italy’s was down 0.5%.

Unlike in the UK, however, economists in the US believe the worst may be behind them. ‘‘It’s quite possible, though not certain, that retrospectively, we’ll say that the recession ended in July or August, may be September,’’ Nobel laureate Paul Krugman was quoted as saying.

There is evidence that his is not undue optimism. The pace of job losses in the US slowed more than forecast in July and the unemployment rate dropped for the first time in more than a year. US GDP also shrank by just 0.3% (equivalent to an annualized 1%) in the seconnd-quarter after a 6.4% drop in the previous three months.

That explains why US Federal Reserve is willing to bet that the nosedive the economy had witnessed in recent months is behind it. Over the last two years, the US has witnessed its worst financial crisis in decades, but that could be ending, which is good news for the world since it accounts for a fifth of global GDP.

Some light showed up at the end of the recession tunnel on Wednesday as France and Germany announced unexpected returns to the growth path, which means that four of the world’s five largest economies and six of the top 10 are now not in recession.

Adding to the sense of optimism, the US Federal Reserve left rates unchanged, saying that the world’s largest economy was showing signs of levelling out. Both France and Germany had been predicted by most economists to face a decline of about 0.3% in their GDPs for the second quarter (April-June) of 2009, but they surprised themselves and the rest of the world by announcing that they’ve actually recorded growth of 0.3% each.

Among the five largest economies of the world, measured in purchasing power parity (PPP) dollars — which is more of an apples to apples comparison — China and India are already growing at healthy rates, although lower than their own pace for the last few years. Japan too has climbed out of recession and so has Germany. These economies and the US account for 47% of world GDP in PPP terms.

The Eurozone as a whole is also now projected to have contracted by just 0.1% compared to the 2.5% fall in GDP in the first quarter (January-March). The growth rates reported by Germany and France may seem like nothing to get excited about, but considering that German GDP shrunk by 3.5% in the first quarter and France’s by 1.3%, it is quite a smart turnaround.

Among the world’s other large economies, Brazil is also now no longer in recession having grown by 1.5% in the second quarter.