Sunday, May 24, 2015

The Week Ahead: GDP, durable goods, new homes

Markets in the  United States are closed on Monday for the Memorial Day holiday. Monday is a bank holiday in London. Tokyo and Sydney are open for business.

The second release of the first-quarter gross domestic product will be published Friday at 8:30 a.m. New York time. In the first release last April, GDP rose at an annual rate of 0.2%, slowing significantly from the prior quarter's 2.2% rate of increase.

Two other potential market movers will punctuate the week, on Tuesday: Durable goods orders at 8:30 a.m. and new home sales at 10 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 S&P 500 index, reported continually during market hours.

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

The index of consumer expectations from the Reuters/University of Michigan consumer sentiment report, at 10 a.m. Friday.

Other items of interest:

Tuesday: The S&P Case-Shiller home price index tracking prices in 20 metropolitan areas at 9 a.m., the Conference Board consumer confidence at 10 a.m. and the Dallas Federal Reserve manufacturing survey at 10:30 a.m.

Thursday:  The National Association of Realtors pending home sales index at 10 a.m. and the Energy Information Administration petroleum inventories at 11 a.m.

Friday: The Institute of Supply Management's Chicago purchasing managers index at 9:45 a.m.

I also keep an eye on the Baltic Dry Index, updated daily, and the 5-year implied inflation rate based on U.S. Treasury yields, which presently stands at 1.43%.

Treasury Debt

Bills
  • 4-week: Announcement Tuesday 11 a.m., auction Wednesday 11:30 a.m., settlement Thursday
  • 3-month: Auction Tuesday 11:30 a.m., announcement Thursday 11 a.m.
  • 6-month: Auction Tuesday 11:30 a.m., announcement Thursday 11 a.m.
  • 52-week: Announcement Wednesday 11:30 a.m., settlement Thursday.
Notes
  • 2-year: Auction Tuesday 1 p.m.
  • 2-year floating rate: Auction Wednesday 1 p.m.
  • 5-year: Auction Wednesday 1 p.m.
  • 7-year: Auction Thursday 1 p.m.
Bonds
  • None.
TIPS
  • None.
Fedsters

Fed Vice Chairman Stanley Fischer, a member of the Federal Open Market Committee, speaks in Tel Aviv, Israel on Tuesday at 12:30 p.m. New York time, at a conference honoring Professor Haim Ben-Shahar. Fischer's subject: "The Federal Reserve and the Global Economy".

Other FOMC members taking to the podium are Richmond Fed Pres. Jeffrey Lacker on Tuesday and San Francisco Fed Pres. John Williams on Thursday.

An FOMC alternate, Cleveland Fed Pres. Loretta Mester, speaks Monday in Reykjavik, Iceland.

One other of the Fed glitterati, Minneapolis Fed Pres. Narayana Kocherlakota, who is unassociated with the FOMC this year, delivers a speech on Thursday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 518 large-cap stocks and exchange-traded funds.

Trading calendar

By my rules for shorter-term trades of Monthly options, I'm trading June options and later for the short legs of vertical, diagonal and calendar spreads and covered calls, and for all legs of butterfly spreads and iron condors. I'm trading September options and later for single calls and puts as well as straddles. Shares and Weekly options, of course, are good at any time.

Good trading.

-- Tim Bovee, Portland, Oregon, May 24, 2015

References

My trading rules can be read here.


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Based on a work at www.timbovee.com.

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