Saturday, June 1, 2013

The Week Ahead: Jobs and Leading Indicators

The Labor Department's employment report will give the markets something to buzz about all week. The focus will be heightened by the prior week's rampant speculation about the Feds intentions: Tighten credit now? Tighten later?

A larger-than-usual collection of leading indicators will also hit the headlines.

The employment report will be released Friday at 8:30 a.m. Eastern.

The ADP employment report, issued by the giant payroll processing company, will provide a sneak preview of the government report when it is issued on Wednesday at 8:15 a.m. And the weekly jobless claims report, Thursday at 8:30 a.m., will provide still more fuel for the employment media fire.

Two other major releases will add spice to the economic stew: The ISM manufacturing survey, produced by the Institute of Supply Management, on Monday at 10 a.m., and international trade on Tuesday at 8:30 a.m.

Leading indicators (in descending order of importance):

The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.

The M2 money supply, at 4:30 p.m. Thursday.

The average hourly workweek in manufacturing from the employment report, at 8:30 a.m. Friday.

Manufacturers' new orders for consumer goods and materials from the factory orders report, at 10 a.m. Wednesday.

Vendor performance (the delivery times index) from the ISM manufacturing survey, at 10 a.m. Monday.

The S&P 500 index, reported continually during market hours.

Average weekly initial jobless claims, at 8:30 a.m. Thursday.

Manufacturers' new orders for non-defense capital goods, from the factory orders report, at 10 a.m. Wednesday.

Other reports of interest:

Monday:  The Purchasing Managers' manufacturing index, shortly before 9 a.m., and construction spending at 10 a.m.

Tuesday: Motor vehicle sales throughout the day.

Wednesday: Productivity and costs at 8:30 a.m., the ISM non-manufacturing index at 10 a.m., petroleum inventories at 10:30 a.m. and the Federal Reserve Beige Book at 2 p.m.

I also follow the Baltic dry index, released daily, tracking the volume of global maritime shipments of coal, iron ore, grain and other raw materials.

Fedsters

There's nothing like a jobs report and the Beige Book to bring the Fedsters into full bloom, like dandelions on a sunny spring day.

Two members of the Federal Open Market Committee, Fed Gov. Sarah Bloom Raskin and Kansas City Fed Pres. Esther George, and an FOMC alternate, Dallas Fed Pres. Richard Fisher, speak on Tuesday.

Raskin and an FOMC alternate, Philadelphia Fed Pres. Charles Plosser, speak on Thursday.

Analytical universe

This week I'll be analyzing new bull and bear signals among 2,309 stocks and exchange-traded funds that have some analyst interest. They are traded both on the major U.S. exchanges and over-the-counter. My universe is selected from mid-cap stocks and larger, defined as market capitalization of $1 billion and greater.

Trading calendar

By my rules, I'm trading July options for short vertical  spreads and September options for single calls and puts. Of course, shares are good at any time.

Good trading!

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