Today we are going to look at the effects that both Retail Sales and Jobless Claims can have on the markets. Keeping up with these pieces of news is vitally important if your going to take Spread betting seriously, with both retail sales and jobless claims having significant effect on the market prices.
Retail Sales matter greatly, many companies listed on the markets are in fact retail companies. Retail sales figures are released by both companies and other bodies with markets anxiously waiting for these figures to be released. If a retailer releases bad sales figures then we can expect the share performance to be negatively effected, unless the market has already priced in such poor sales figures. A recent example of how bad sales figures negatively impacted a retailer is Tesco whose recent poor performance over the Christmas period lead to 5 billion being knocked off the company value. A series of bad or good retail sales announcements can also have you an indication of how the economy is heading, if retailers are coming out with consistently good statements it might suggest that the economy is performing strongly. Whereas if a string of bad results come out from what are usually good performers it would suggest that there is serious concern to be had about the state of the economy. Retail sales results can also help you scan for market sectors that are performing well and those that aren’t.
In the US the number of individuals that have filed for unemployment benefits is reported weekly as the US Jobless Claims figure. Unemployment figures are released for other countries as well but not as frequently as the US. The huge size of the US economy also plays a role in how important the data is. The smaller the number of people who are claiming unemployment benefits means that more people have jobs and therefore an income. The increased spending power this brings is a big positive for the economy. The opposite is also true, if the number of people claiming unemployment benefits rises it can send a bleak message out about the state of the economy which will directly hit market prices. This is a general rule of thumb and there can be cases where the US Jobless Claims do not give out such a clear message about the state of the economy and how the markets might move.