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Trend indicator SuperTrend was created on the basis of ATR and CCI. It is an excellent indicator of trend direction. It can be used as a foundation of the trading system that is based on following the trend. Formula UpperLevel=(High+Low)/2+Multiplier*Atr(Period); LowerLevel=(High+Low)/2-Multiplier*Atr(Period); Trading use The SuperTrend indicator is build upon on two indicators – ATR and CCI. CCI (the standard parameter is 50) points the direction of trend movement, meanwhile ATR is used to determine the levels of indicator. If CCI is above 0, SuperTrend either rises or moves horizontally (depending on ATR). If CCI is negative, SuperTrend falls (depending on ATR also). One of the possible ways to use this indicator is to enter the market after correction paying attention to the color of SuperTrend: if it changed from red to green (it means the trend turned from descending to ascending), wait for the first descending correction and open buy position. Open sell position if the indicator changed its color from green to red: wait for the first ascending correction and sell. It should also be noted that SuperTrend can indicate the short-term support and resistance levels. But one should carefully study them before using and only if they are necessary. More accurate data of this type is produced by Tenkan and Kijun lines of Ishimoku indicator supertrend.zip

Durable Goods Report The Advance Report on Durable Goods Manufacturer's Shipments, Inventories and Orders, or the Durable Goods Report, provides data on new orders received from more than 4,000 manufacturers of durable goods, which are generally defined as higher-priced capital goods orders with a useful life of three years or more, such as cars, semiconductor equipment and turbines.More than 85 industries are represented in the sample, which covers the entire United States. Figures are provided in current dollars along with percentage change from prior month and prior year for new orders, total shipments, total unfilled orders (orders that have been booked but not filled as of month-end) and inventories. Revisions are also included for the prior three months if they materially affect prior-released results. The data compiled for consumer durable goods is one of the 10 components of the Conference Board's U.S. Leading Index, as growth at this level has typically occurred in advance of general economic expansion. The headline figure will often leave out transportation and defense orders, as they can show higher volatility than the rest of the areas. In these industries, the ticket prices are sufficiently high that the sample error alone could swing the presented figure significantly. It is useful for investors not only in the nominal terms of order levels, but as a sign of business demand as a whole. Capital goods represent the higher-cost capital upgrades a company can make, and signals confidence in business conditions, which could lead to increased sales further up the supply chain and gains in hours worked and non-farm payrolls. Investors can play with the numbers here and look at things such as the rates of growth of inventories versus shipments; changes in the inventory/shipments ratio over time can point to either demand (falling ratio) or supply (rising ratio) imbalances in the economy. Because capital goods take longer on average to manufacture than cyclical goods, new orders are often used by investors to gauge the likelihood of sales and earnings increases by the companies who make them. For instance, a company like Boeing could make revenue adjustments on the upside based on strong new order growth, signs of which could be gleaned from the Durable Goods Report. In addition, when production and capacity at U.S. manufacturers is rising, it helps to combat inflationary pressure, as more goods will be produced for consumer purchase. Investors should be cautious to see through the high levels of volatility found in areas of the Durable Goods Report. Month-to-month changes should be compared with year-over-year figures and year-to-date estimates, looking for the overall trends that tend to define the business cycle.

Draghi Says Bond-Buying Pledge Helps Transmit Rates European Central Bank President Mario Draghi said his pledge to buy government bonds is helping to ensure that interest-rate cuts reach the parts of the euro-area economy that need them the most. “Our measures gave breathing space from markets driven by panic, which were forcing the economy into a position where inappropriately high interest rates would make default a self-fulfilling prophecy,” Draghi said in a speech in London. “Today we are seeing some encouraging signs of tangible improvements in financial conditions. Spreads in sovereign and corporate debt markets have narrowed considerably.” Since Draghi pledged last year to buy unlimited amounts of government bonds in exchange for countries signing up to economic reforms, conditions in euro-area financial markets have improved. Even though his so-called Outright Monetary Transactions program has yet to be used, bond yields in distressed countries such as Greece and Spain have dropped from euro-era records and banks’ reliance on ECB funding has declined, indicating confidence is returning. The ECB has “started observing convincing signs that fragmentation on the funding side for banks has decreased greatly,” Draghi said last night. “And although bank lending to businesses and households remains anaemic, we are now seeing some signs of slight improvement on the lending side as well. Challenging Conditions The yield on Greek 10-year bonds fell below 10 percent on May 3 for the first time since October 2010. It traded at 8.83 percent at 8:28 a.m. in Frankfurt. The yield on Spanish 10-year securities rose 2 basis points to 4.31 percent. The euro was little changed at $1.2937. The ECB cut its benchmark interest rate to a record low of 0.5 percent this month and Draghi indicated he’s ready to lower borrowing costs again if the economic outlook deteriorates. The Frankfurt-based institution will publish new forecasts in June. “Economic conditions in the euro area remain challenging” and “labor-market conditions remain weak,” Draghi said. “To maintain and expand the productive capacity of our societies, national governments need to improve the structural functioning of their respective economies.” The “painful” reforms already undertaken by debt-strapped countries “are starting to bear fruit,” he said. “We see this very clearly, for instance, in the impressive improvement in export performance in Ireland, Spain and Portugal and in the recent uptick in industrial production in the latter two countries.” Europe’s monetary union is more stable than it was a year ago and markets are “fully confident that the euro is a strong and stable currency,” Draghi said.

UK: BBA Mortgage Approvals rise by 32.2K in April The number of home loans issued by the BBA in April amounted to 32.2K, following 31.4K registered the previous month. Consensus pointed to slightly more increase of 32.7K.

Currency War caused USD to soar - HSBC HSBC Strategists believe that due to the ensuing currency war, the USD rally has further to run. They believe that the currency war is getting bigger and more intense, drawing ever more protagonists into the fray. They feel that in part, this may be because of the success of those central banks who have already sought economic advantage through targeting their currency. Further, they see that the market has realised there is no point in fighting the central banks at this time, and the USD is the natural candidate to act as the offset to this desire for depreciation elsewhere. They write, “If anything, the risks are for even greater USD strength than we have pencilled into our new forecast profiles.” So far, they note that Asia ex-Japan has largely not been involved in the currency war, but were the Yen to weaken substantially further, this could change. They believe that such an escalation of the conflict would boost the USD. In addition, their USD bullishness does not rely on an early tapering or end to US QE3, but if the Fed acted sooner than we expect then the USD would capitalise. The USD has already risen but this is just the beginning.

Durable Goods Orders in U.S. Probably Rose in April After Slump Orders for U.S. durable goods probably increased in April after falling by the most in seven months as companies invested in aircraft and capital equipment, economists forecast ahead of a report today. The 1.5 percent gain in bookings for goods meant to last at least three years would follow March’s 6.9 percent decline, the biggest since August, according to the median forecast from 78 economists surveyed by Bloomberg. Orders excluding transportation equipment, which is a volatile component, may have risen 0.5 percent last month after dropping 2.9 percent in March Quickening activity in the housing and auto industries may ripple throughout manufacturing, rendering the economy better able to recover from a slowdown this quarter. At the same time, government cutbacks, higher taxes on consumers and cooling exports are crimping demand, which means any rebound will be slow to develop. “Manufacturing won’t fall off the cliff in the next six months, but I see it crunching along slowly,” said Jeffrey Herzog, a senior economist at Oxford Economics Ltd. in New York. “The main near-term risk is that the effects from the higher taxes or government spending cuts are stronger than anticipated.” The Commerce Department will release the durable-goods data at 8:30 a.m. in Washington. Estimates (DGNOCHNG) in the Bloomberg survey ranged from a drop of 5.9 percent to a gain of 4.6 percent. Aircraft bookings probably underpinned April’s rebound. Boeing Co. (BA), the Chicago-based aerospace company, said it received 51 orders last month, up from 39 in March. Business Investment Orders for non-defense capital goods excluding aircraft, considered a proxy for future business investment, picked up by 0.5 percent last month following a 0.6 percent drop in March, according to the median forecast of economists surveyed. A pickup in manufacturing would stem a recent slowdown in inventory building that curbed activity. The Institute for Supply Management’s manufacturing index declined in March and April, falling to just above the 50 level that represents the dividing line between contraction and expansion. The U.S. economy probably cooled in the second quarter, giving businesses a reason to reduce the amount of stockpiles they hold, according to economists surveyed by Bloomberg. The federal government has also slashed outlays under sequestration, and American earners are facing increased payroll taxes. The weaker pace of growth is hurting manufacturers’ shares. The Standard & Poor’s Supercomposite Machinery Index has advanced 9.7 percent this year, compared with a 15.7 percent gain in the broader S&P 500. Housing, Autos In the second half of 2013, a faster expansion will probably give companies reason to spend more, supporting producers. Home construction is picking up, and automakers are boosting output. “We see indicators which point towards strengthening economies,” Louis Chenevert, chief executive officer of United Technologies Corp. (UTX), said during an industry conference on May 21. Orders in the first quarter signal a rebound in the second half of the year, he said. SOURCE: Bloombergs.com

Beige Book Made public in 1983, the Summary of Commentary on Current Economic Conditions by Federal Reserve District, or Beige Book, as it is known, has a different style and tone than many other indicators. Rather than being filled with raw data, the Beige Book takes a more conversational approach. The book has 13 sections in total; 12 regional reports from each of the member Fed district banks, preceded by one national summary drawn from the individual reports that follow it. This is the first chance investors have to see how the Fed draws logical and intuitive conclusions from the raw data presented in other indicator releases. The Beige Book is published eight times per year, just before each of the Federal Open Market Committee (FOMC) meetings. While it is used by committee members during the meeting itself, it does not carry more clout than other data values and indicators. There is a lot of real-time data that the Fed has at its disposal and, unfortunately, notes from the FOMC meetings themselves are currently not public information. The Beige Book aims to give to give a broad overview of the economy, bringing many variables and indicators into the mix. Discussion will be about things such as labor markets, wage and price pressures, retail and ecommerce activity and manufacturing output. Investors can see comments that are forward-looking; the Beige Book will contain comments that look to predict trends and anticipate changes over the next few months or quarters. he Beige Book by itself is not likely to have a big effect on the markets in the short term, mainly because no new data series is presented here. Investors and Fed watchers look to the Beige Book to gain insight into the next FOMC meeting. Is there language that shows fear about inflation? Do the reports suggest that the economy needs a financial boost to continue growing? This is the critical information that will be analyzed in the Beige Book. To read the Beige Book effectively, one must become accustomed to "Fed speak", a special verbiage of measured remarks intentionally designed to say a little without ever saying a lot. The last thing the Fed wants to do with its words is corner itself into a pre-supposed policy decision prior to the next FOMC meeting. Investors won't ever see a definitive statement about the Fed going one way or the other with monetary policy, but there may be valuable clues in the Beige Book - at least for the trained eye The Fed directors and their staffs will use their very long proverbial arms to obtain an economic pulse that can't be found in any other indicator's report. They will interview business leaders, bank presidents, members of other Fed boards and hundreds of other informal networks before writing the reports that will be compiled in the Beige Book. Investors who hold investments that conduct business in specific regions of the country may find valuable information about how those areas are performing as a whole. For instance, a stockholder in a regional bank operating in the Southeastern U.S. would want to know what the Atlanta Fed Bank says about the health of that region. Occasionally, the Beige Book will give evidence that may contradict what a previous indicator has presented; the Employment Report may suggest that there is slack in the labor market, while Beige Book reports may give anecdotal evidence that wage pressures are forming, or that certain specific labor markets are tight On rare occasions, the Beige Book will be released at a time when information is badly needed in the markets; shock events like the September 11, 2001, terrorist attacks or a stock market crash can effectively wipe the data slate clean, and investors will count on the Fed to help describe the relative state of affairs during these tumultuous times.

Factory Orders Report The Manufacturers' Shipments, Inventories and Orders Report, often referred to as the Factory Orders Report, contains partly new and partly old information, although the old information is broken down more thoroughly in this release. The report contains the Durable Goods Report information, which is released about one week prior (but with revisions), and introduces non-durable items into the mix, representing industries such as apparel and food products. The Factory Orders Report is meant to capture the overall health of the entire manufacturing sector, measuring new orders, inventories, total shipments and unfilled orders for the month surveyed. Statistics are displayed in current dollars and as percent changes from prior month and prior year. As with the Durable Goods Report, the indicator derives most of its value as a supply/demand indicator; inventory levels can be compared to shipments, new orders and other indicators of consumer demand such as retail sales and gross domestic product (GDP). The Factory Orders Report is more useful than the Durable Goods Report for examining trends within industries. While only "computer equipment" may be counted in the Durable Goods Report, the Factory Orders Report will show separate figures for computer hardware, semiconductors, monitors, etc. This is mainly due to the speed at which the (advance) Durable Goods Report is released, which makes it more timely but also more vague. The report is not likely to move the broad markets, as about half of the data is already known - the ratio of durable to non-durable manufacturing (in dollars) is about 55/45. Factory Orders Report levels are, however, valuable for estimating future economic output levels, as estimates from the Factory Orders Report are used to calculate GDP itself. Non-durables manufacturing industries may move as a group upon the release, as investors in those stocks pour through the data looking for clues on upcoming earnings levels. Because current dollars are used to calculate values, neither inflation nor price - changes that may affect how inventories are valued - is accounted for. For example, if the price of petroleum drops mid-month, a company holding the same inventory levels based on volume will show a drop in the value of its inventory in the Factory Orders Report.

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Consumer Confidence Index The Consumer Confidence Index (CCI) is a monthly release from the Conference Board, a non-profit business group that is highly regarded by investors and the Federal Reserve. CCI is a unique indicator, formed from survey results of more than 5,000 households and designed to gauge the relative financial health, spending power and confidence of the average consumer. There are three separate headline figures: one for how people feel currently (Index of Consumer Sentiment), one for how they feel the general economy is going (Current Economic Conditions), and the third for how they see things in six months' time (Index of Consumer Expectations). The Consumer Sentiment Index is a component of the Conference Board's template of economic indicators. Historically, changes in this index (of the three released) has tracked the leading edge of the business cycle well. There are other sentiment indicators that can sometimes be confused with the Consumer Sentiment report or used in conjunction with it, such as the University of Michigan Sentiment Report, and some investors will try to average the two reports to get their own sense of consumer sentiment. A strong consumer confidence report, especially at a time when the economy is lagging behind estimates, can move the market by making investors more willing to purchase equities. The idea behind consumer confidence is that a happy consumer - one who feels that his or her standard of living is increasing - is more likely to spend more and make bigger purchases, like a new car or home. It is a highly subjective survey, and the results should be interpreted as such. People can grab onto a small situation that garners a lot of mainstream press, such as gas prices, and use that as their basis for overall economic conditions, fair or not. There are no real data sets here, and people are not economists, so they cannot be counted on to realize that, for example, because gas prices may only represent 5% of their expenses, they should not sour their entire economic outlook. Because of its subjective nature and relatively small sample size, most economists will look at moving averages of between three and six months for consumer confidence figures before predicting a major shift in sentiment; some also feel that index level changes of at least five points are necessary before calling for the reversal of an existing trend. In general, however, rising consumer confidence will trend in line with rising retail sales and, personal consumption and expenditures, consumer-driven indicators that relate to spending patterns. Regional breakdowns of the data are valuable for seeing the breadth of sentiment across the country, which can be a useful factor in the real estate market, along with indicators such as housing starts and existing home sales.

Building Permits A type of authorization that must be granted by a government or other regulatory body before the construction of a new or existing building can legally occur. The U.S. census bureau reports the finalized number of the total monthly building permits on the 18th work day of every month. The monthly building permit report is closely watched by economists and investors alike. Since all related factors associated with the construction of a building are important economic activities (for example, financing and employment), the building permit report can give a major hint as to the state of the economy in the near future. UP =>> DOLLAR UP DOWN =>> DOLLAR DOWN

Money supply The money supply is just that: the amount of money floating around the economy and available for spending. Different numerical aggregates show different subsets of money based on their liquidity, starting with M0 (the most liquid), which is just the dollar value of physical cash and coin, and M1, which includes all of M0 as well as checking accounts, traveler's checks and demand deposits. The M2 aggregate includes the dollar value of all of M1 in addition to savings accounts, time deposits of less than $100,000 (such as certificates of deposit), and money market funds held by investors. (For related reading, see What Is Money?) The Federal Reserve publishes data on the levels of M1 and M2 weekly, and has been collecting data on the money supply since the 1950s. In the less financially complicated world that existed then, the supply of money showed a very strong correlation to how much money was spent, and it was therefore studied fervently by economists for clues to economic growth. Legislation passed in 1978 mandated the Federal Reserve to set annual targets for money supply growth. At the time, there was a still a high correlation between money supply growth and overall economic growth, as measured by gross domestic product (GDP). Over time, that close relationship started to break down due to changes in banking accounts, the proliferation of financing companies, and more widespread investment among consumers (stock and bond investments are not captured in M1 and M2 aggregates). When the legislation expired in 2000, the Fed announced that it would no longer set targets for growth of the money supply as a matter of policy, although it remains an important indicator for predicting inflation and spending patterns among consumers. In the words of the Fed, "…the FOMC [Federal Open Market Committee] believes that the behavior of money and credit will continue to have value for gauging economic and financial conditions." The M2 aggregate is a large component of the Conference Board's U.S. Leading Index (which contains 10 indicators), making up more than 30% of the index. The Federal Reserve has a measure of control over the money supply aggregates, which differentiates this indicator from most others. Through open market operations such as buying and selling Treasuries and setting the reserve requirements, the Fed does things to alter the money supply through its daily course of business. Setting short-term interest rates to guide the economy remains the core policy directive of the FOMC, but changes to rates such as the fed funds rate do eventually manifest themselves in the money supply, albeit with a time lag No single release from the Fed regarding the money supply is going to shock the market; the weekly release schedule alone takes a lot of the surprise factor out mix, so this report will rarely move the markets in the short term. History has shown that the money supply tends to rise faster (accelerate faster) during periods of economic expansion that during contraction periods. If there is one measure that is looked at more than the rest, it's the M2 figure - cash equivalents in this designation are deemed to be collectively liquid enough to be spent without any real delays or penalty costs. While growth in the money supply does not directly indicate future spending growth as it once did, it does indicate that inflation could be around the corner. This is where knowing both money supply growth and GDP growth becomes very handy - if money supply growth is rapidly outpacing economic growth, there will soon be more money chasing after the same amount of goods. This echoes the dryly famous quote: "Inflation is always and everywhere a monetary phenomenon." Changes in the money supply are usually quoted in the media on an annualized percentage basis, which helps to smooth out short-term statistical "blips" that can occur week to week.

Business Outlook Survey The Philadelphia Federal Reserve's Business Outlook Survey (also known as the Philadelphia Fed Report) is a monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey and Delaware. The survey is conducted in the vein of the Purchasing Managers Index (PMI) report; it questions voluntary participants about their outlook on things such as employment, new orders, shipments, inventories and prices paid. Answers are given in the form of "better", "worse" or "same" as the previous month, and, as with the PMI, results are diffused into an index, only this index uses a median value for expansion of 0, rather than 50. The Philly Fed Report signals expansion when it is above zero and contraction when below. As a result, values can be negative month to month. The survey has been conducted each month since May 1968, and is considered one of the most valuable regional purchasing manager indexes (There are currently almost 15 such regional reports, covering much of the U.S., albeit in piecemeal fashion). As far as regional manufacturing reports go, the Philly Fed Report is one of the most watched, both for its early delivery to investors (released before the month is even over), and its blend of manufacturing sectors and businesses. The Philly Fed Report, along with the Chicago NAPM Index, have shown high correlations to the upcoming and hugely followed PMI report. This index isn't typically a big market mover (due to its small sample size and limited geographic range), but if a big surprise in terms of percentage change appears in the report, quick-thinking investors may anticipate similar changes to the PMI and make market moves accordingly. The report is presented with solid commentary from the Reserve Bank itself, and often includes special survey questions that may be extremely timely if the economy is unsure of future growth possibilities.

German business morale rises more than expected in May May 24 (Reuters) - German business morale rose far more than expected in May, rebounding after two consecutive falls and suggesting Europe's largest economy is picking up steam after posting anaemic growth in the first quarter. The Munich-based Ifo think tank said on Friday its business climate index, based on a monthly survey of some 7,000 firms, rose to 105.7 in May from 104.4 in April. That compared with a median forecast in a Reuters poll of 40 economists for the business climate index to climb to 104.5 and beat even the highest forecast for 105.5. The data sent the euro higher against the dollar to a session high of $1.2959 and prompted German bund futures to pare gains.

Fed’s Bullard says change to QE would be an easing of policy stimulus, not an end to it US labour market is improving and expects it to continue to do so More optimistic that the majority of FOMC members that economy is improving and will continue improving Worry is inflation coming in lower than expected, would like to see inflation approaching target before any tapering of QE Does not see inflation turned around before June FOMC meeting Not surprised at recent market volatility after sharp rises in Japan Speaking on CNBC

GfK: Germany's Consumer Morale Seen Improving In June German consumer confidence should continue to improve up in June as economic and income expectations brightened slightly in May and willingness to buy remained at an extremely high level, the GfK Group reported Friday. GfK's consumer climate indicator should rise to 6.5 in June from an unrevised 6.2 in May, the report said. Most analysts had expected little change. GfK noted that positive consumer sentiment is reflected in first quarter GDP figures. "This confirms GfK's hypothesis that private consumption has developed into a major pillar of economic growth," it said. Looking ahead, strong consumer sentiment "ostensibly depends on the current extremely good situation in Germany being maintained," GfK said. "However, if the debt crisis escalates once again, the consumer climate is likely to hit hard times." The report showed that following a moderate fall in April, economic expectations improved slightly in May, rising 1.3 points. "The indicator is currently at -0.2 points and therefore remains around the long-term average of zero," GfK said. Income expectations extended April's upward trend, with the indicator rising 3.1 points to the highest level since July 2012. "As a result of the continued stability of the labour market, an improvement in collective bargaining agreements in comparison with previous years for many employees and a falling rate of inflation, the majority of consumers are confident that they will have more disposable income in real terms," the report said. The sub-index for willingness to buy improved by a marginal 0.1 point to the highest level since March 2012. "From consumers' perspective, the conditions continue to be ideal for the very good buying sentiment to be sustained," GfK said. A stable labour market and low interest rates encourage consumption, it said. Meanwhile, aided by the European Central Bank's latest decision to cut interest rates further, Germans' propensity to save dropped to a news historic low in May.

Non-Farm Payroll The non-farm payroll (NFP) report is a key economic indicator for the United States. It is intended to represent the total number of paid workers in the U.S. minus farm employees, government employees, private household employees and employees of nonprofit organizations. Non-farm increase =>> USD increase Non-farm decrease=>> USD decrease

Housing Starts The New Residential Construction Report, known as "housing starts" on Wall Street, is a monthly report issued by the U.S. Census Bureau jointly with the U.S. Department of Housing and Urban Development (HUD). The data is derived from surveys of homebuilders nationwide, and three metrics are provided: housing starts, building permits and housing completions. A housing start is defined as beginning the foundation of the home itself. Building permits are counted as of when they are granted. Both building permits and housing starts will be shown as a percentage change from the prior month and year-over-year period. In addition, both data sets are divided geographically into four regions: Northeast, Midwest, South and West. This helps to reflect the vast differences in real estate markets in different areas of the country. On the national aggregates, the data will be segmented between single-family and multiple-unit housing, and all information is presented with and without seasonal adjustment. Housing starts and building permits are both considered leading indicators, and building permit figures are used to compute the Conference Board's U.S. Leading Index. Construction growth usually picks up at the beginning of the business cycle (the Leading Indicator Index is used to identify business cycle patterns in the economy, and is used by the Federal Open Market Committee (FOMC) during policy meetings). This is not typically a report that shocks the markets, but some analysts will use the housing starts report to help create estimates for other consumer-based indicators; people buying new homes tend to spend money on other consumer goods such as furniture, lawn and garden supplies, and home appliances. The housing market may show the first signs of stalling after a recent rate hike by the Federal Reserve. This is because rising mortgage rates may be enough to convince homebuilders to slow down on new home starts. For investors looking to evaluate the real estate market, housing starts should be looked at in conjunction with existing home sales, the rental component of the Consumer Price Index and the Housing Price Index According to the Census Bureau, "it may take four months to establish an underlying trend for building permit authorizations, five months for total starts and six months for total completions", so investors should look more closely at the forming patterns to see through often-volatile month to month results.

ISM Non-Manufacturing Report The Institute for Supply Management (ISM) releases the ISM Non-Manufacturing Report on Business, also known as the Service Report, each month.The ISM, a non-profit group with more than 40,000 members engaged in the supply management and purchasing professions, saw the need to represent more than just the manufacturing industry, and especially to give attention to the notoriously absent service sector, which reflects the majority of real gross domestic product (GDP). While the previously-released ISM Manufacturing ROB and its well-known Purchasing Managers Index (PMI) receives the most Wall Street attention, the Non-Manufacturing Report is quickly becoming a well-read and analyzed indicator since it was first released in 1998. Currently, the report does not have a composite index - the Business Activity Index is the most summary-oriented piece of the report, as it measures respondents' views on the overall level of business activity; the Business Activity Index will usually be the headline figure presented in publications and the media. The entire report relates to investors because it represents a much larger share of the economy and, most importantly, it covers the hard-to-measure services industries, the fastest-growing part of the U.S. economy. The survey covers many of the same categories that are found in the PMI, including employment, supplier deliveries, inventory levels, production levels and prices. Because it is a relatively new indicator, the Service Report has yet to gain the same attention of the PMI, but it is quickly appearing on many top analysts' radars because of its breadth of coverage and original survey format. The Service Report is also a timely indicator, coming out just days after the survey month. For investors, the Service Report may be more useful than the PMI for examining the status of the industries in which they hold investments, and examining the trends taking place in that corner of the market. Each index (there are 10 in total) can be looked at individually, but the Business Activity Index is the most comprehensive; it asks whether the overall business conditions will be better, the same, or worse in the upcoming month. The magic number for expansion within the Business Activity Index is 50; levels above 50 indicate that the service-related areas of the economy are generally expanding. Rates of change are important as well as where the economy sits within the current business cycle.

Jobless Claims Report The Jobless Claims Report is a weekly release that shows the number of first-time (initial) filings for state jobless claims nationwide. The data is seasonally adjusted, as certain times of the year are known for above-average hiring for temporary work (harvesting, holidays). Due to the short sample period, week-to-week results can be volatile, so reported results are most often headlined as a four-week moving average, so that each week's release is the average of the four prior jobless claims reports. The release will show which states have had the biggest changes in claims from the previous week; the revised edition shows up about a week later, at which time a full breakdown by state and U.S. territory is available. Also released with this report are the relatively minor data points of the insured unemployment rate and the total unemployed persons. These are not seen as valuable indicators because the total unemployed figure tends to stay relatively constant week to week. New jobless claims for the week reflect an up-to-the-minute account of who is leaving work unexpectedly, reflecting the "run rate" of the economy's health with little lag time. The Jobless Claims Report gets a lot of press due to its simplicity and the theory that the healthier the job market, the healthier the economy: more people working means more disposable income, which leads to higher personal consumption and gross domestic product (GDP). The fact that jobless claims are released weekly is both a blessing and a curse for investors; sometimes the markets will take a mid-month jobless claims report and react strongly to it, particularly if it shows a difference from the cumulative evidence of other recent indicators. For instance, if other indicators are showing a weakening economy, a surprise drop in jobless claims could slow down equity sellers and could actually lift stocks, even if only because there isn't any other more recent data to chew on. A favorable Jobless Claims Report can also get lost in the shuffle of a busy news day, and hardly be noticed by Wall Street at all. The biggest factor week to week is how unsure investors are about the future direction of the economy. Most economists agree that a sustained change f 30,000 claims or more is the benchmark for real job growth or job loss in the economy. Anything less is deemed statistically insignificant by most market analysts.

Trade Balance Report Investors and policymakers are increasingly using trade balances and information as a way to determine the health of the U.S. economy and its relationship with the rest of the world. The indicator within the Trade Balance Report that is most well known is the nominal trade deficit, which represents the current dollar value of U.S. exports minus the current dollar value of U.S. imports. The report also covers trade balances for services, such as financial and informational management, of which the U.S. is currently a large exporter, creating a surplus in this category. In the physical goods category, the largest components of the monthly nominal value are for consumer goods and energy (petroleum). There are several different aggregate measures of trade balance that are recorded and presented in the media, but the one that is most cited will be the current account,a measure of the net of physical goods trade, services trade, investment income and unilateral transfers. A more detailed breakdown of the financial receipts between the U.S. and abroad is available quarterly, summarizing the monthly data and reporting adjustments as needed; it is also released by the Bureau of Economic Analysis (BEA) he U.S. has been running a trade deficit for more than 20 years (and a current account deficit for some time as well), set against the backdrop of a long-term U.S. economic expansion. As a nation, the U.S. imports more than it exports, which, in itself, is not a bad thing. Because the U.S. economy has been expanding for so long, most other nations have not been able to keep up, meaning that U.S. demand for things as a nation is higher than other nations' demand for U.S. goods. What causes worry among some is the long-term trend of more money flowing out than coming back in. The consensus is that the trade deficit must be balanced out by an equal dollar amount of foreign investment in U.S. assets. For example, if the U.S. spends $1 billion dollars to purchase computers from Japan, by definition, Japan is holding $1 billion U.S. dollars or other dollar-denominated assets. In practice, most of the balance in trade is made up by foreign countries holding U.S. Treasury securities. But when interest rates are low, our debt is not as attractive on a risk-adjusted basis, creating concern that our investments will no longer attract foreign ownership, causing the value of the dollar to drop and leading to decreased world purchasing power. The current account as a percentage of total gross domestic product (GDP) is an important metric because it shows how large the current account number is in relation to overall output in the economy. The Trade Balances Report can move the markets upon release if the data shows a marked change from the prior period. Compared to other indicators, this report is relatively hard to estimate outside of petroleum, so some surprise factors can occur from time to time. Most investors want to see the trade balance maintain current levels or fall, as it is a sign that exports are rising, and the companies who export are increasing sales in those areas of the world.

Retail Sales Retail Sales is very closely watched by both economists and investors. This indicator tracks the dollar value of merchandise sold within the retail trade by taking a sampling of companies engaged in the business of selling end products to consumers. Both fixed point-of-sale businesses and non-store retailers (such as mail catalogs and vending machines) are used in the data sample. Companies of all sizes are used in the survey, from Wal-Mart to independent, small-town businesses. The data released will cover the prior month's sales, making it a timely indicator of not only the performance of this important industry (consumer expenditures generally make up about two-thirds of total gross domestic product), but of price level activity as a whole. Retail Sales is considered a coincident indicator, in that activity reflects the current state of the economy. It is also considered a vital pre-inflationary indicator, which creates the biggest interest from Wall Street watchers and the Conference Review Board,which tracks data for the Federal Reserve Board's directors. The release will contain two components: a total sales figure (and related % change from the previous month), and one "ex-autos", as the large ticket price and historical seasonality of auto sales can throw off the total figure disproportionately. The release of the Retail Sales Report can cause above-average volatility in the stock market. Its clarity as a predictor of inflationary pressure can cause investors to rethink the likelihood of Fed rate cuts or hikes, depending on the direction of the underlying trend. For example, a sharp rise in retail sales in the middle of the business cycle may be followed by a short-term hike in interest rates by the Fed in the hope of curbing possible inflation. This would cause investors to sell bonds (causing yields to rise), and could pose problems for stocks as well, as inflation causes decreased future cash flows for companies. If retail sales growth is stalled or slowing, this means consumers are not spending at previous levels, and could signal a recession due to the significant role personal consumption plays in the health of the economy. One of the most important factors investors should note when viewing the indicator is how far off the reported figure is from the so-called consensus number, or "street number". In general, the stock market does not like surprises, so a figure that is higher than expected, even when the economy is humming along well, could trigger selling of stocks and bonds, as inflationary fears would be deemed higher than expected. Retail companies themselves can be especially volatile with the release of this widely read industry report. The release data will show the sales performance of all the component sectors within retail (such as electronics retailers and restaurants), allowing investors to peek in on relative "pockets of strength" within the overall figures. An investor holding stocks in retail can see how his or her holdings are performing relative to the sector as a whole - a valuable analysis regardless of overall market conditions.

Producer Price Index he Producer Price Index (PPI) is a weighted index of prices measured at the wholesale, or producer level. A monthly release from the Bureau of Labor Statistics (BLS), the PPI shows trends within the wholesale markets (the PPI was once called the Wholesale Price Index), manufacturing industries and commodities markets. All of the physical goods-producing industries that make up the U.S. economy are included, but imports are not. The PPI release has three headline index figures, one each for crude, intermediate and finished goods on the national level: PPI Commodity Index (crude): This shows the average price change from the previous month for commodities such as energy, coal, crude oil and the steel scrap. PPI Stage of Processing (SOP) Index (intermediate): Goods here have been manufactured at some level but will be sold to further manufacturers to create the finished good. Some examples of SOP products are lumber, steel, cotton and diesel fuel. PPI Industry Index (finished): Final stage manufacturing, and the source of the core PPI. The core PPI figure is the main attraction, which is the finished goods index minus the food and energy components, which are removed because of their volatility. The PPI percentage change from the prior period and annual projected rate will be the most printed figure of the release. The PPI looks to capture only the prices that are being paid during the survey month itself. Many companies that do regular business with large customers have long-term contract rates, which may be known now but not paid until a future date. The PPI excludes future values or contract rates. The PPI does not represent prices at the consumer level - this is left to the Consumer Price Index (CPI), which is released a few trading days after the PPI. Like the CPI, the PPI uses a benchmark year in which a basket of goods was measured, and every year after is compared to the base year, which has a value of 100. For the PPI, that year is 1982. Changes in the PPI should always be presented on a percentage basis, because the nominal changes can be misleading as the base number is no longer an even 100. The biggest attribute of the PPI in the eyes of investors is its ability to predict the CPI. The theory is that most cost increases that are experienced by retailers will be passed on to customers, which the CPI could later validate. Because the CPI is the inflation indicator out there, investors will look to get a sneak preview by looking at the PPI figures. The Fed also knows this, so it studies the report intently to get clarity on future policy moves that might have to be made to fight inflation .