Economic and Earnings Calendar - Important Releases Move the Markets
Economic and earnings calendar are of a huge importance for stock investors, not to mention day traders. Public economic and financial releases drive the market.
Economic and earnings calendar are of a huge importance for stock investors, not to mention day traders; if you are the latest, than you simply need to know which macroeconomic releases will be published, which companies will report earnings and what other financial news are due on each and every day. The point is that all this news is driving stock prices and I am sure you do not want to be on the wrong side of a day trend. Of course, if you are a very long term investor, than you will not worry about each and every announcement, but it is still wisely to follow at least the most important macroeconomic trends and financial results of the companies, which are in your portfolio.
Earnings Calendar
Under SEC guidelines dating back to the 1930's and 40's, every public company is required to file quarterly (10-Q) and yearly (10-K) financial reports. An earnings news release presents a public company's financial performance during a particular quarter and is typically distributed to the public three to six weeks after the close of the quarter. A company usually provides a comparison of its current results to the comparable financial period in the previous year. Most companies will then describe the factors for the financial results in a quotation from senior management. The news release may also include a discussion of quarterly highlights, recent developments, and an outlook for the company. Finally, a corporate news release traditionally includes a balance sheet and a statement of operations for the quarter and the year to date.
On the day when company releases earnings, it is very common that stock price of such company will have above average volatility; this means, it is very high probability, that the stock will move up or down aggressively, depending upon the results - surprisingly good results not expected by analytics and professionals normally results in strong up-move, while disappointing results letting down the analytics normally forces the stock price down. It is rarely the case that in the days following of earnings results there is no extraordinary movement of the stock. For more conservative investors it is recommended to exit the position before earnings release, then evaluate new public know data and buy back in if the stock is still interesting. Of course, there are some trading strategies, which are solely based on trading the releases; buy before and sell after if positive surprise is expected, buy after and sell after on very good news etc.
Economic Calendar
Traders use economic calendar to identify possible market-moving events. Especially day traders and scalpers research the exact date and time of a specific event and get ready to act before the announcement. They prepare to act in every case scenario: long or short. When the announcement is published, they pay close attention to it, monitor the effect of the market and act accordingly.
The precise release schedule for each and every economic indicator is helping traders to plan ahead all the major stock market movements. Of course, there are economic information releases that are much more important than others. The most powerful events, which can move the stock markets significantly, include changes in gross domestic product (GDP), unemployment numbers, industrial production, consumption, inflation figures, interest rate decisions, and market sentiment indicators. Beside macroeconomic data you should notice government reports and speeches of influential persons of the financial world; they can have a huge impact on the markets as well.
Successful investors often check economic and earnings calendar. You should consider doing the same.
Written by: Goran Dolenc
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