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Stock Markets and Economic Data

September 16, 2010

There are three major reports for today, covering employment, the inflation outlook, and business activity. If each aligns bullishly, we might have enough of a catalyst for the major indexes to break through resistance and their multi-month trading ranges.

The first and perhaps the most important report of the day will be Jobless Claims at 8:30 a.m. ET. The consensus forecast calls for initial claims to come in at 460,000, up from the last week’s 451,000.

NDXThe range of expectations is fairly wide, from a bullish 440,000 at the low, to a bearish 476,000 at the high. There could be more of a bias to the upper end as several states had not filed reports last week, which may have been responsible for the lower-than-expected number. Continuing claims are expected to drop to 4.46 million.

The Producer Price Index will also be released at 8:30 a.m. ET. The so-called headline number, which is the month-over-month change including food and energy, is expected to rise by 0.3 percent. Excluding food and energy, the month-over-month change is expected to be a small 0.1 percent.

Only a large deviation from expected values, especially in the core excluding food and energy, would likely move the markets. The impact would likely be in currencies or Treasuries.

The Philadelphia Fed Survey will be released at 10 a.m. ET. Consensus has the survey coming in at 2, up from the previous -7.7.

The bearish low end of the forecast range is at -7.7, while the bullish upper end of expectations calls for a reading of 8. A number that comes in close to either extreme of the range, or breaks it, would have a stronger and broader market impact.

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