Economic Data And Its Influence On The Financial Markets

The things which contribute to price levels and action in the financial markets are numerous and diverse, and their influences can vary through time, and across different markets. This article identifies the different types of Economic Data influences and the role they play.




There are two ways economic information can influence prices. The first is in the macro sense. Macroeconomic inputs include:




Interest Rates


Economic Growth (GDP)


Government Budget Surpluses/Deficits


Trade Balances


Commodity Prices


Relative Currency Exchanges Rates


Inflation


Corporate Earnings (both for individual companies and the broad collection)




These elements will generally all have long-term inputs in to the pricing of any given market. They do not tend to move in sharp, dramatic fashion, so their influences also tend to be seen over longer periods of time.




That said, the release of economic data related to the above can be seen to have serious impact in the short-term activity in the markets. This comes primarily in the form of data releases. Some of the most important are:




Employment Data


Trade Data


GDP growth figures


Consumer & Producer Inflation rates


Retail and Wholesale Sales


Confidence & Sentiment Readings (U. Michigan survey, etc.)


Income & Spending


Production


Interest Rate policy decisions


Earnings releases




The markets can react in very, very dramatic fashion to these releases when they are out of line with expectations. The foreign exchange market, namely the EUR/USD exchange rate, provides a striking example.




On one Friday morning at 8:30 Eastern the monthly Non-Farm Payrolls report hit the wires. This report (released on the first Friday of each month) probably provides the most short-term volatility across all market sectors of any regular economic release. When the data comes in well off of market expectations, fireworks can ensue, as was the case in the example. Over the course of about 2-3 minutes EUR/USD fell more than 20 pips, turned around and rose about 60 pips, then fell back down to near where it had been before the data was announced (a pip being 1/10,000 of a Dollar). It then proceeded to run nearly 100 pips higher in fairly steady fashion over the course of the next hour.




Here is another example, this time of T-Bond futures.




When those payroll figures were released at 8:30 the market dropped more than two full points. One point on the T-Bond futures contract is worth $1000, so each contract fell more than $2000 in about two minutes. Consider that the margin on a contract at the time was probably around $2500. That means a trader could have lost more than 80% on the trade in the blink of an eye.




It is also important to understand that in the futures pits such data events often result in fast market conditions. This means that the action is so hectic that there may literally be trading going on at several different prices in different parts of the pit. This is a risk of having open positions at the time of a major news release. The market may snap back fairly quickly, as in the chart above, but in the meantime the trader’s positions may have been liquidated on a stop order at a substantial loss.




Fortunately, all major economic releases are well documented. They are done on a pre-announced calendar which is readily available on any number of web sites, and of course in the business news media. In the vast majority of cases, one can also find out ahead of time from any number of sources what the expectations are for the release.




Foreknowledge of pending data events may not prevent losses which may result from unexpected figures. It will, however, allow the trader to recognize and understand when risks are increased. Make sure, especially if you are a short-term trader, to know what data is coming out. It can make a difference in your performance.

Is Re-Financing Always Worthwhile Anyway?

This is a very important question which all homeowners should ask themselves both at the start and towards the end of the process of re-financing. The answer to this question can spur the homeowner to investigate re-financing further or convince the homeowner to table the thoughts of re-financing for the moment and concentrate on other aspect of owning a home.




Establish Financial Goals




This should be the first step in the process of determining whether or not re-financing is worthwhile. Without this step, a homeowner cannot accurate answer the question of the worth of re-financing because the homeowner may not fully understand his own financial goals. While financial goals may run the gamut from one extreme to another the most basic question to ask is whether the more significant goal is long term savings or increased monthly cash flow. This is important because re-financing can usually achieve these two goals.




Do You Want to Save Money in the Long Run?




Homeowners who establish a goal of saving money in the long run should consider re-financing options such as lower interest rates or shorter loan terms. Both of these options can considerably lower the amount of interest the homeowner is paying on the loan. This is significant because paying less interest will result in a greater cost savings.




Consider an example where a homeowner has an existing debt of $100,000, an interest rate of 6.25% and a loan term of 30 years. Just by reducing the loan term to 15 years the homeowner can significantly decrease the amount which is paid in interest during the course of the loan. However, this option will also result in an increase in the monthly payments made by the homeowner. Therefore this type of re-financing option may only be available to those who have enough cash flow to compensate for the increase in monthly payments.





Do You Want to Increase Your Monthly Cash Flow?




Some homeowners may have a chosen goal of increasing their monthly cash flow. For these homeowners the overall cost savings may not be as important as having more money available to them each month. These homeowners might consider a re-financing option in which they are able to extend their loan terms. This means they will be repaying the existing debt over a longer period of time. The homeowner will pay more in interest in the long run but will achieve their goal of lower monthly payments and an increased cash flow.




How Will Re-Financing Affect Tax Deductions?




This is another serious consideration for homeowners who are interested in investigating the possibility of re-financing. The interest paid on a home loan is often tax deductible. A homeowner who re-finances in a manner which results in less interest being paid annually may adversely affect their tax strategy. The implications of this type of chance can be amplified for homeowners who were previously just below a significant tax break line. A significant decrease in the amount of interest paid will mean a significant decrease in the deduction the homeowner is allowed to take. This reduced deduction can put the homeowner in an entirely different tax bracket and could end up costing the homeowner money in the long run. For this reason, homeowners who are considering re-financing should have a tax preparation professional determine the ramifications re-financing will have on their tax return before a decision is made.

New Generation Of Financial Information Systems Makes Crunching Numbers Faster And Easier

In what seems like only a few short years, fiscal selective information systems (FIS) have evolved from simple, back-office support systems into fully integrated solutions that can handle everything from payroll to accounts receivable and gross cycle management. But such increased functionality would not be possible without the ability to combine disparate databases into a single source of entropy that can be mined at multiple levels.

The importance of data mining quickly became apparent to corporate executives at James Edmund Scripps Wellness in San Diego, who had been working with six separate databases before upgrading to a newer variant of Dawn Approach Coach/Affected role Fiscal Handler from Boca Raton, Fla.-founded Eclipsys Corp.

Edward Wyllis Scripps currently operates five acute care facilities totaling nearly 1,400 beds, two medical groups with 14 outpatient clinics, a home health agency and a health plan. Today, yearly revenues average $1.35 billion, which is a big turnaround from a few years ago when posted operating losses in 2000 and 2001 totaling approximately $26 1000000 and $22 one thousand thousand and respectively. In an effort to bolster their bottom line, devised a number of key strategies, not the least of which was drastically changing their methods of charge and reimbursement.

"A couple of years ago we moved away from capitated risk to fee-for-service risk," says David Ferdinand Julius Cohn, vice president of patient services. Additionally, since each infirmary had been running its own Eclipsys FIS, the organization made the decision to rise these 13--old systems by installing an enterprisewide FIS.

Realized similar gains in efficiencies, although not all were directly related to the adoption of a new software solution. admits that a significant portion of gain was due to process improvements in recovering underpayments from third-party payers.




"We look at trends by types of underpayments and develop strategies to work together with our payer partners," he says, adding that collection of underpayments in financial 2003 was 9 percent above 2002, amounting to More than $15.4 meg. The auditing of Thomas More than 100,000 accounts during outpatient tax income charge-capture audits yielded Sir Thomas More than $10 a million in additional charges.




Furthermore, monthly cash collections for 2004 exceeded those for 2003 by $10.4 , while net taxation between 2001 and 2003 increased by $44 as a result of improvements in charge capture, coding, reduced bad debt and incremental tax revenue recovery. In addition, operating profitability, during that same period, improved by $40 . A focus on reversing the losses incurred during 2000 and 2001 also led to establish a systemwide cycle steering committee, as well as multidisciplinary teams on the level so that "everybody would be on the same page,".




Drake adds that coordinating the steering committee and teams helped define how the centralized business office could best support the needs of each facility. Those weekly meetings covered a wide range of topics, she says, including coverage, interim and obstacles to discharge. But went even further in overhauling its strategies.




It developed a -dedicated claims processing team within Kaiser's regional claims center in Pasadena, Calif., which reduced the claims backlog by $6. It outsourced unpaid commercial and PPO outpatient claims to QuadraMed. "We wanted our people to stay focused on higher-dollar claims," explains . Drake also says, "We did an awful lot of work on appeals by working with our payers and improving our contracts."




There's no question that upgrading to Dawning Memory access Director/Patient role Managing director variation 11.3 improved the organization's efficiency in accessing and analyzing data. A major driver in that rising slope was the EDI transaction set requirements mandated by HIPAA, says.




Also, needed to streamline its Medicare process, since Medicare accounts for about 35 percent to 40 percent of its business. Due to time constraints resulting from the HIPAA deadline, was unable to install a Web- edition of the Eclipsys software, choosing instead the character- interpretation that could ruin on a UNIX platform using a cache system, says Drake. However, plans are already in the works to ascent to reading 11.4.

Financial Readiness: How Prepared Are You?

Home is where most people feel safe and comfortable. But sometimes — say, when a hurricane, flood, tornado, wildfire, or other disaster strikes — it’s safest to pack up and go to another location.

When it comes to preparing for situations like weather emergencies, financial readiness is as important as a flashlight with fully charged batteries. Leaving your home can be stressful, but knowing that your financial documents are up-to-date, in one place, and portable can make a big difference at a tense time.


Here are some tips for financial readiness in case of an emergency:

Conduct a household inventory. Make a list of your possessions and document it with photos or a video. This could help if you are filing insurance claims. Keep one copy of your inventory in your home on a shelf in a lockable, fireproof file box; keep another in a safe deposit box or another secure location.

Buy a lockable, fireproof file box. Place important documents in the box; keep the box in a secure, accessible location on a shelf in your home so that you can “grab it and go” if the need arises. Among the contents:


- your household inventory

- a list of emergency contacts, including family members who live outside your area

- copies of current prescriptions
- health insurance cards or information

- policy numbers for auto, flood, renter’s, or homeowner’s insurance, and a list of telephone numbers of your insurance companies




- copies of other important financial and family records — or notes about where they are — including deeds, titles, wills, birth and marriage certificates, passports, and relevant employee benefit and retirement documents. Except for wills, keep originals in a safe deposit box or some other location. If you have a will, ask your attorney to keep the original document.




- a list of phone numbers or email addresses of your creditors, financial institutions, landlords, and utility companies (sewer, water, gas, electric, telephone, cable)




- a list of bank, loan, credit card, mortgage, lease, debit and ATM, and investment account numbers




Social Security cards




- backups of financial data you keep on your computer




- an extra set of keys for your house and car




- the key to your safe deposit box




- a small amount of cash or traveler’s checks. ATMs or financial institutions may be closed.




- Consider renting a safe deposit box for storage of important documents. Original documents to store in a safe deposit box might include:




- deeds, titles, and other ownership records for your home, autos, RVs, or boats




- credit, lease, and other financial and payment agreements




- birth certificates, naturalization papers, and Social Security cards




- marriage license/divorce papers and child custody papers




- passports and military papers (if you need these regularly, you could place the originals in your fireproof box and a copy in your safe deposit box)




- appraisals of expensive jewelry and heirlooms




- certificates for stocks, bonds, and other investments and retirement accounts trust agreements





- living wills, powers of attorney, and health care powers of attorney insurance policies




- home improvement records




- household inventory documentation




- a copy of your will




Choose an out-of-town contact. Ask an out-of-town friend or relative to be the point of contact for your family, and make sure everyone in your family has the information.




After some emergencies, it can be easier to make a long distance call than a local one.




Update all your information. Review the contents of your household inventory, your fireproof box, safe deposit box, and the information for your out-of-town contact at least once a year.

How To Safeguard Your Financial Life

How to Safeguard Your Financial Life Several financial planners would agree that one of the foremost and important steps that you should take to protect your financial stability is to set aside funds as emergency reserve. The concept that you have the


fund for emergency and unexpected events is enough to


help you stay away from using your credit card and


drown yourself in debt.




How to Get Started




Everyone must stash a little extra cash in case of


emergencies. However, how much money should you keep?


Although the topic of exactly how much money is needed


for your emergency fund is open to debate, the minimum


amount should be enough to cover your expenses for


daily living for at least three months. It is also


wiser to save for six months though most financial


planners agree on a full year worth of cash.




Your personal circumstances and what it takes to


provide you with a peace of mind are the elements to


help you determine just how cautious you want to be.


If for instance, you have well-off parents who have


always been supportive and willing to help you in a


financial crisis, an emergency fund for three months


will be sufficient. On the other hand, if you had


reach for you credit card for help and end up paying


15% in interest on the debt, you would be better off


saving enough money for your expenses that would last


for at least six months.




If by any chance you are thinking about where to place


your money, emergency fund, paying off the credit card


debt or funding your 401(k), you can always start with


your credit card debt. Next, you can contribute to


your 401(k). This step is especially useful since you


can later borrow money from your 401(k). However, as


soon as all those are finished, return to your project


of setting up your emergency fund.




If you do not feel like you are required to make your


entire funds this week, you can start like everyone


else. Begin by setting aside a monthly amount, like


for instance, 5% of your paycheck or other amount that


allows you to build one month’s worth of living


expenses over the course of a full year. It is also


advisable and helpful to make this automatic. You can


do this by asking your bank to do an automatic program


for deduction from your checking account to your


savings account.




Additionally, monitor you spending habit each month


and always search for areas that you can develop. If


by any chance you receive a promotion, bonuses, or


other unexpected windfalls, always think about


including them to your emergency fund.




Where to Keep the Cash




Keep your emergency fund somewhere that is both easily


accessible and safe because you might be required to


get the cash in a hurry during emergencies. Remember


not to put your cash in the freezer but do not tie


them up together in stocks whose worth may have


declined by the time you need them.




The best option you have is to open a savings account


or money market account. However, always examine their


offer with regards to the minimum balance, interest


rate and other terms.




By time you think you have saved enough, learn how to


stop. You can now sleep easier and try to start


placing your additional saving into higher-interest


and usually less accessible investments or accounts.