Calendars are important tools in trading and investing because they help participants prepare for what is to come. I have experienced the usefulness of calendars first-hand. In fact, I always ensure that I have checked the calendar every day before I start trading. This article will look at the top five financial calendars that investors and traders should always use.
An economic calendar is a tool that gives investors information on the past and upcoming economic releases from around the world. The calendar is made up of several key details that are useful to investors and traders. It shows the time when the event will come out, the currency that will be affected, the previous, expected, and the actual data.
While the calendar is mostly useful for forex traders, some numbers have an impact on other assets. Some of the top data in the economic calendar are:
- Employment data – These numbers show the number of jobs added or lost in an economy. Some countries like the United States and Canada publish these numbers every month. Others like New Zealand publish them once per quarter.
- Retail sales – The data shows the overall volume of retail sales in a country. These are important numbers since the retail sector employs a large portion of a country’s population. Consumer spending is also a key part of the economy.
- Interest rates – The economic calendar provides data on when central banks like the Fed, ECB, and Bank of Japan will publish their rate decisions.
- Manufacturing data – The data shows when a country will release the latest manufacturing PMI and production numbers.
- Inflation – The data shows the change in prices in a given month. The CPI shows the changes in consumer prices, while PPI shows the change in producer prices.
We recommend that you form a habit of looking at the calendar every day before you start trading.
As you do that, you will find that you are aware of when key numbers will be released even without looking at it. The illustration above shows what an economic calendar looks like.
Publicly traded companies in most countries are required by law to publish their results periodically. In most countries, they are required to do so once per quarter. Other countries require them to release their results once or two times per year. Over the years, divisions have emerged among proponents of quarterly results and those who oppose them. Opponents say that these quarterly results promote short-termism among companies.
The earnings calendar is a tool that shows you when a company will release its quarterly results. The calendar shows the time of the day when the firm will publish the results. In the US, this time is usually in the premarket or in the aftermarket.
The calendar also shows the previous results in the form of earnings-per-share (EPS) and revenue. For big companies, the calendar also has the median estimates from Wall Street analysts. This calendar is mostly useful among stock traders and investors.
As a stock trader or investor, using the earnings calendar is important because shares tend to experience intense volatility towards and after the results. The illustration above shows what an earnings calendar looks like.
An Initial Public Offering (IPO) is a closely-watched event when a company goes public. It is when its shares become available for retail investors. IPOs, especially for large and popular companies, are usually closely-watched events. At times, a company’s shares will grow after it goes public.
At other times, an IPO becomes the ideal time when an investor can buy a company’s shares. For example, investors who bought Shopify shares when the company went public have seen their holdings jump by more than 5,000%.
The IPO calendar shows the day when a company will go public, the exchange where the shares will be listed, such as NYSE and Nasdaq, the IPO value, and the price range. The screenshot above shows what an IPO calendar looks like.
A dividend refers to funds that a company returns to investors. It is one of the popular ways in which shareholders benefit by owning stocks. The other way is how the company’s shares perform in the market.
Companies pay dividends periodically. There are those that return funds to shareholders every month and others that send the payouts once per quarter or two times a year. At times, a company’s share price can rise ahead of its ex-dividend date. This is simply because some investors buy the stock for the sole purpose of receiving the payout.
A dividend calendar is a useful document for traders and investors who regularly pay attention to the payout dates. It shows the day that the company will go ex-dividend, the name of the company, the type of dividend, and the overall yield. Above is an example of a dividend calendar.
Companies regularly split their shares in order to make them more affordable to small traders. In a split, the company increases the number of shares and then slashes the price of the stock. For example, assume that a company has 1 million outstanding shares and its stock is trading at $300, which means that it has a market capitalization of more than $300 million.
Therefore, in a 2:1 split, a company can increase its outstanding shares to 2 million and then lower the price to $150. In this case, the company’s market cap will remain at $300 million. The splits calendar can give you more details on when a company will do a stock split and what to expect.
Financial calendars are important tools that help you know what to expect. While all these calendars are important, the essential ones are the economic and earnings calendar. Other calendars are holidays, expiration, Initial Coin Offering calendar (ICO), and crypto events calendars. The latter two are most useful among crypto investors.