An article by Entrepreneur magazine listed 14 Things Ridiculously Successful People Do Every Day. The secrets to success according to the article?
- Focusing on minutes, not hours
- Focusing on only one thing
- Using a notebook – and writing everything down
- Following the 80/20 rule (80 percent of results comes from 20 percent of activities).
Let’s see how this applies to traders this week.
- Wall Street traders this week will be focusing on the minutes leading up to a number of big events.
- On Monday, they will be focusing on one thing: the PCE Price Index report.
- Many traders use a notebook to record big market events and they realize that a big portion of their profits (maybe 80 percent come from 20 percent of their trades).
Wall Street traders are bracing for a busy week. Here are three things big events that will drive gold prices this week.
- Monday – The December Personal Income and Spending data is released 8:30 am ET.
Why this matters to markets? The answer is one simple word – inflation.
Tucked inside Monday’s economic report is the Federal Reserve’s “preferred” inflation indicator known as the PCE Price index. The Fed has valiantly been attempting to stimulate inflation in recent years and there are signs that price pressures are starting to kick higher. The Fed’s target for inflation is 2.0 percent.
There are numerous signs that inflation is moving higher these include:
- Medical costs are not under control and continue to increase
- Housing costs are rising at the fastest pace in nearly 10 years
- Energy prices are on the rise
- After years of no raises – wages are finally increasing
Sharper than expected gains in inflation numbers this week would be gold-bullish.
- Wednesday – The Federal Open Market Committee (FOMC) will release its interest rate decision at 2 pm ET.
Why this matters? The Federal Reserve has broadcast its intentions to hike interest rates – perhaps several times this year. A trend toward higher interest rates is generally a negative for gold and other precious metals, which pay no interest.
Right now, Wall Street does not expect the Fed to hike rates at its January meeting. If they did – it would be a surprise and would rock markets. Traders will be reading the post-meeting announcement closely for clues on what may lie ahead for 2017.
- Friday – The Labor department releases its monthly non-farm payrolls and unemployment rate data for January at 8:30 am ET.
Why this matters? The jobs data is one of the biggest economic data market movers of the month and can trigger fireworks if the numbers come out higher or lower than expected. The December jobs report showed that job growth is slowing, but that wages are rising. In December, non-farm payrolls jumped by 156,000 and the overall unemployment rate stood at 4.7 percent.
Economists will be watching this closely for signs if the labor market is beginning to fizzle and how much wages are increasing.
Now is a good time to conduct your annual portfolio review if you haven’t already re-balanced your assets. Market fireworks beginning to heat up. The precious metals complex has started off the year strong and many Wall Street analysts believe it is just the beginning of a bigger rally move. Gold and other precious metals are already beating returns in stocks since the start of the year. Blanchard and Company has been helping individual investors for over 40 years to build a tangible asset allocation for portfolio diversification. Learn more about us here.