Are you ready? CPI, PMI Manufacturing, and New Home Sales

It is said that time goes by faster when you're busy. Well, expect this morning to pass you by like a Bugatti Veyron with all the important indicators that will be released: CPI, PMI Manufacturing, and New Homes Sales. Lets look at how they can impact gold, the stock market in general, and the stocks I'm currently holding.

Consumer Price Index at 8:30

Let's start by the indicator impacting the most consumers; CPI. The Consumer Price Index measure the increase or decrease in consumer prices for a basket of goods. Through the years, the items in that basket change when the Bureau of Labor Statistics recalibrate the value of different items. For example, is the value of a television set 10 years ago the same as today? 

One of the two indicators that the Federal Reserve is watching closely is the CPI. If there's a surprise today and it increases more than expected ( CPI y/y of -0.1% is expected), then it may be a signal for the FED to increase rates sooner. Even if they don't do it, at least that's what investors and traders will think. Therefore, in that scenario we can expect stocks and commodities prices to go down.

PMI Manufacturing at 9:45
PMI Manufacturing is one of the most important leading indicators. It is basically a survey sent to purchasing executives of 600 industrial companies. Expected is a reading of 54.6. If it's higher than that, then again it could scare investors and traders in thinking that the FED will raise rates sooner than expected. In that scenario stocks and commodities prices would go down also.

New Home Sales at 10:00
New Home Sales is similar to Existing Home Sales, except that it only tracks new homes. Analysts expect a reading of 464K new homes sold for this month. New Home Sales is also a leading indicator. Therefore, a better than expected reading could be bearish for stocks and commodities, again because investors and traders would be scared that the FED hike rates sooner than expected.

I personally own Five Below (FIVE), COS.CA (COS.TO), and Tesla Motors (TSLA). If those indicators readings are better than expected it could be bearish especially for FIVE and TSLA how are positively correlated with major stock market indexes.

Is it time to trade Tesla Motors (TSLA)?

What I like about TSLA is that the probability distribution of its price divided by the price of the S&P500 is really close to a normal distribution.

In blue TSLA and in red the probabilistic fit. The probability that TSLA goes above $196 according to this model is 0.97. This indicates that it may be the right to jump back in.

There's also encouraging news regarding the battery:

Tesla (TSLA) cars may soon be able to go farther on a single charge. The electric car company is hinting at battery life upgrades to the Model S sedan. Tesla's CEO, Elon Musk, tweeted that the car will receive an update to "end range anxiety," and announced that details will be released during a Thursday press conference. The standard Model S can travel about 200 miles per charge. - Yahoo Finance

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