Conference Board Leading Indicators Releases Thursday, June 19
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Announcement:
Conference Board Leading Indicators released Thursday, June 19 at 10:00 a.m. EST.
Description:
The Weekly Leading Indicator Index typically does not have a significant impact on markets, as the data within the report is aged, despite the attempt at bringing forth “leading†numbers. What’s more, the components within the report have all previously been released to the public in previous weeks; thus the data is really “old news.†However, when we take a step back and look at the successive data over time, we can identify economic trending, especially in times of weakness. What’s more, the index can be a significant indicator of troublesome times to come, should the numbers show economic slack for more than three consecutive months.
Trader Take:
Taking a look at the Leading Indicators Index, we see that the index dipped in February to 101.8, from 102.1 in January of 2008. Incidentally, this was when the markets truly began to hear talk of recession, as the index had been traveling in negative territory for three consecutive months. Then, in March (subsequent with a 75-point basis cut by the FOMC), the index made a slight recovery to 101.9, though for the most part, the report was “flatâ€. In April, the first month of the second quarter, the index showed slight recovery to 102.0, which incidentally was the first gain in five months.
Thursday’s report will offer guidance to the totality of leading indicators in May. When we total the data for the month, the index could wane once again.
While the data within the report is truly “lagging†the concept of leading comes from the duration of time the values travel in positive, or negative territory. Should the leading indicators index once again begin to decline, commencing in May, markets may infer more trouble to come within the economy, and thus rule out the possibility of a rate cut by the FOMC in 2008.
Truly, the larger picture here is the anticipation of whether economic stimulus of late (I.E. rebate checks and rate cuts), will be enough to offset elevated oil prices, and thus, buoy the U.S. economy.
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