Market Behaviour : Business activity
A number of key economic indicators can give you a good idea of what business
is doing and how that information may impact the stock markets. Key
business indicators to watch include:-
✓ The Ivey Purchasing Managers Index: This index, sponsored by the
Richard Ivey School of Business (University of Western Ontario) and the
Purchasing Management Association of Canada (PMAC), shows monthto-
month variation in economic activity.
The Ivey Purchasing Managers Index measures monthly changes in
purchases as indicated by a panel of purchasing managers from across
Canada. The 175 participants have been selected geographically and by
sector to match the Canadian economy as a whole. The index includes
both the public and private sectors. Index panel members indicate
whether activity is higher than, the same as, or lower than the previous
month across five categories: purchases, employment, inventories, supplier
deliveries, and prices. The index is released at 10 a.m. ET on the
third or fourth working day of each month at http://iveypmi.uwo.ca.
✓ The American Purchasing Managers Index (PMI): One of the first economic
indicators released each month is the American Manufacturing
Report on Business, which surveys purchasing managers and provides
reviews of new orders, production, deliveries, and inventories. This
report is released at 10 a.m. ET the first business day of each month
and reflects data compiled from the previous month. You can track this
report online at the Institute for Supply Management www.ism.ws.
✓ Durable Goods Orders: The American Commerce Department releases
another critical economic indicator of business activity in the area of
Durable Goods Orders. This indicator measures the dollar volume of
orders, shipments, and unfilled orders of durable goods, or types of merchandise
that have a life span of three years or more. This report serves
as a leading indicator of manufacturing activity and can move the stock
market, especially when its numbers vary from expectations. You can track
the Durable Goods Orders online at www.census.gov/indicator/www/
m3/index.html.
✓ The Building Permits Survey for Canada: This survey covers 2,400
municipalities representing 95 percent of the population. It provides an
early indication of building activity. In addition to data on the number
and value of building permits issued by Canadian municipalities, this
publication provides information on the average value of dwellings, the
number and value of mobile homes, and permits issued for building
renovation. The value of planned construction activities shown in this
release excludes engineering projects (such as waterworks, sewers, or culverts) and land. The Building Permits Survey is released by Statistics
Canada on the fourth business day of each month at 8:30 a.m. ET and
can be found at www.statcan.gc.ca.
✓ Housing Starts and Building Permits: The American report is another
that’s released by the Commerce Department. It can be a leading indicator
of the direction the economy will take. When the number of permits
rises, a positive economic indicator results. About 25 percent of investment
dollars are plowed into housing starts, and that makes up about 5
percent of the overall economy. The report is broken down by regions —
Northeast, Midwest, South, and West — so you can also get a strong
indication of the strength of the economy on a regional basis. You can
track this indicator online at www.census.gov/const/www/C40/
table2.html.
✓ Manufacturing Surveys: The Canadian Monthly Survey of Manufacturing
covers 21 industry groups that produce goods for both industrial
and consumer use. The manufacturing sector’s activity is monitored
monthly and annually, as it accounts for a large part of Canada’s gross
domestic product. It’s released by Statistics Canada around the 16th of
each month at 8:30 a.m. ET and can be found at www.statcan.gc.ca.
Each Federal Reserve Bank district in the United States compiles data
from regional manufacturing surveys that can help you find a score of
indicators including new orders, production, employment, inventories,
delivery times, prices, and export and import orders. Positive reports
indicate an expanding economy. Negative reports indicate a contracting
economy. The two most closely watched are the Philadelphia survey at
www.phil.frb.org/econ/bos/bosschedule.html and the Chicago
survey at www.chicagofed.org/economic_research_and_data/
cfmmi.cfm. If you’re trading in regional stocks, following the manufacturing
surveys from the Federal Reserve Banks in key regions that
you follow can help you determine the direction of the economy for the
areas most relevant to the stocks you’re trading.
is doing and how that information may impact the stock markets. Key
business indicators to watch include:-
✓ The Ivey Purchasing Managers Index: This index, sponsored by the
Richard Ivey School of Business (University of Western Ontario) and the
Purchasing Management Association of Canada (PMAC), shows monthto-
month variation in economic activity.
The Ivey Purchasing Managers Index measures monthly changes in
purchases as indicated by a panel of purchasing managers from across
Canada. The 175 participants have been selected geographically and by
sector to match the Canadian economy as a whole. The index includes
both the public and private sectors. Index panel members indicate
whether activity is higher than, the same as, or lower than the previous
month across five categories: purchases, employment, inventories, supplier
deliveries, and prices. The index is released at 10 a.m. ET on the
third or fourth working day of each month at http://iveypmi.uwo.ca.
✓ The American Purchasing Managers Index (PMI): One of the first economic
indicators released each month is the American Manufacturing
Report on Business, which surveys purchasing managers and provides
reviews of new orders, production, deliveries, and inventories. This
report is released at 10 a.m. ET the first business day of each month
and reflects data compiled from the previous month. You can track this
report online at the Institute for Supply Management www.ism.ws.
✓ Durable Goods Orders: The American Commerce Department releases
another critical economic indicator of business activity in the area of
Durable Goods Orders. This indicator measures the dollar volume of
orders, shipments, and unfilled orders of durable goods, or types of merchandise
that have a life span of three years or more. This report serves
as a leading indicator of manufacturing activity and can move the stock
market, especially when its numbers vary from expectations. You can track
the Durable Goods Orders online at www.census.gov/indicator/www/
m3/index.html.
✓ The Building Permits Survey for Canada: This survey covers 2,400
municipalities representing 95 percent of the population. It provides an
early indication of building activity. In addition to data on the number
and value of building permits issued by Canadian municipalities, this
publication provides information on the average value of dwellings, the
number and value of mobile homes, and permits issued for building
renovation. The value of planned construction activities shown in this
release excludes engineering projects (such as waterworks, sewers, or culverts) and land. The Building Permits Survey is released by Statistics
Canada on the fourth business day of each month at 8:30 a.m. ET and
can be found at www.statcan.gc.ca.
✓ Housing Starts and Building Permits: The American report is another
that’s released by the Commerce Department. It can be a leading indicator
of the direction the economy will take. When the number of permits
rises, a positive economic indicator results. About 25 percent of investment
dollars are plowed into housing starts, and that makes up about 5
percent of the overall economy. The report is broken down by regions —
Northeast, Midwest, South, and West — so you can also get a strong
indication of the strength of the economy on a regional basis. You can
track this indicator online at www.census.gov/const/www/C40/
table2.html.
✓ Manufacturing Surveys: The Canadian Monthly Survey of Manufacturing
covers 21 industry groups that produce goods for both industrial
and consumer use. The manufacturing sector’s activity is monitored
monthly and annually, as it accounts for a large part of Canada’s gross
domestic product. It’s released by Statistics Canada around the 16th of
each month at 8:30 a.m. ET and can be found at www.statcan.gc.ca.
Each Federal Reserve Bank district in the United States compiles data
from regional manufacturing surveys that can help you find a score of
indicators including new orders, production, employment, inventories,
delivery times, prices, and export and import orders. Positive reports
indicate an expanding economy. Negative reports indicate a contracting
economy. The two most closely watched are the Philadelphia survey at
www.phil.frb.org/econ/bos/bosschedule.html and the Chicago
survey at www.chicagofed.org/economic_research_and_data/
cfmmi.cfm. If you’re trading in regional stocks, following the manufacturing
surveys from the Federal Reserve Banks in key regions that
you follow can help you determine the direction of the economy for the
areas most relevant to the stocks you’re trading.
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