Beige Book: The informal, commonly used name for the ongoing Fed reports titled, The Summary of Commentary on Current Economic Conditions, by Federal Reserve District. Published eight times a year just before each Federal Open Market Committee meeting on interest rates, this report is used to inform members of the committee on changes in the economy since the last meeting.
How the Beige Book is compiled: Each of the twelve Federal Reserve Banks gathers anecdotal information on current economic conditions in its district. Anecdotal information comes in such forms as reports from bank and branch directors, interviews with key business contacts, economists, market experts and other sources. The information summarized in the Beige Book is organized by district and sector.
Significance of the Beige Book for the Federal Open Market Committee: The primary goal of FOMC meetings is to establish a target Federal Funds rate. FOMC members also receive economic forecasts (the Green Book) and an analysis of monetary policy alternatives (the Blue Book), but the Beige Book is the only of these reports made available to the public. Often eagerly awaited by investors and economists, the Beige Book has a considerable impact on the potential actions the FOMC may take at its next meeting. The Beige Book is made public approximately two weeks before the FOMC meets.
Sources: Investopedia, Federal Reserve Board, Investing Answers
Bellwether: An event or indicator that shows the possible presence of a trend in overall market or sector direction. The performance of certain companies/stocks and bonds are considered by analysts to indicate the condition of the economy and financial markets because their performance is well-correlated with a trend. Bellwether companies are usually the market leaders in their respective sectors. The term is a combination of “bell” and “wether.” Shepherds would often hang bells around the necks of the wether (male sheep) that led the flock, in order to find them.
Source: Investor Glossary, Investopedia
Black Monday: The day the Dow Jones Industrial Average (DJIA) lost almost 22 percent, marking the start of a global stock market decline. Occurring on October 19, 1987, Black Monday was one of the most dramatic days in financial history. By the end of that month, most of the major exchanges had declined by 20 percent.
The cause of the Black Monday has not been attributed to any single news event. While there are many theories offering various explanations, most agree that mass panic caused the crash to escalate. Since 1987, a number of protective mechanisms have been established to prevent panic selling.
Source: Investopedia
Blue-Chip Stocks: Refers to the stock of a well-established and financially sound company that has been in operation for many years. Having a market capitalization in the billions, a blue-chip stock is typically a market leader or top company in its sector. Most blue-chip stocks have paid stable or rising dividends over the years. It is believed that blue-chip stock is a reference to poker, where blue chips are the most expensive.
Source: Investopedia
BRICS: An acronym first used in 2003 to describe the economies of Brazil, Russia, India and China. According to Forbes Magazine, the general consensus is that the term was first used in a Goldman Sachs report which speculated that by 2050 these four economies would be wealthier than most of the current major economic powers.
In March 2012, South Africa was added to the acronym, thus becoming “BRICS.” At that time, Brazil, Russia, India, China and South Africa met in India to discuss the formation of a development bank to pool resources. At that point, the BRIC countries were responsible for about 18 percent of the world’s GDP and 40 percent of the world’s population.
Source: About.com
Briefcase Indicator: During Alan Greenspan’s tenure as Federal Reserve Chairman, CNBC started to analyze the thickness of Greenspan’s briefcase he carried into the Federal Open Market Committee meeting. If the briefcase was thin, the media guessed that there would not be a change in policy. If the briefcase was thick, the conjecture was that a change in monetary policy was going to be announced. While this theory did not always prove to be accurate, it does demonstrate the intense interest in any Fed action.
Source: Investopedia, CNBC
Bureau of Economic Analysis (BEA): A division of the U.S. Department of Commerce responsible for economic data analysis and reporting used in determining economic trends and cycles (e.g.; the gross domestic product of the U.S.). BEA reports are used to make policy decisions by government and investment decisions in the private sector.
Source: Investopedia, Wikipedia
Bureau of Labor Statistics (BLS): A government agency within the U.S. Department of Labor that researches and releases data regarding consumer spending, employment, inflation, productivity, wages and other economic indicators. These reports often considerably impact market sentiment.
Source: Investopedia