With 87% of the companies in the S&P 500 reported as of this morning, let’s call earning season almost over. As we look out over the next few months, investor’s will gain clues on the economy from various sources.
The most impactful and important source of information on the economy, and therefore the markets, generally comes from economic reports during “off earnings season” time. Remember earnings season runs about two to three weeks a quarter and often leaves a lot of unanswered questions. The stage of our economy magnifies or minimized certain economic reports. If we had to rate the top three economic reports for us currently, they would be 1.) Unemployment 2.) GDP and 3.)Various Sentiment numbers. The importance of reports changes as the economy does, and a report showing a major swing always captures our attention.
Company Presentations and Pre-Releases:
In between quarters we often get updates from a few, but certainly not all companies, and often also receive various investor presentations. We gain valuable insights as to the feel of the economy during these times and often gain greater knowledge of management strategies and tweaking of business plans during corporate presentations. Certain companies may profess how good or bad they are doing during the off earnings season, which may change the outlook of their competitors and therefore the price of their company stock.
Other country economic decisions (interest rate policy), disasters (flu, war, and social unrest) and price volatility (oil, transportation, and actual commodity market prices) are also good indicators of the current economic situation, all of which we watch closely for clues.
Certainly this is not a complete list of clues we and other investors watch for, but it is a strong foundation of major items and hopefully gives you a better understanding of key economic items.