Sunday, April 15, 2012

The Week Ahead: Earnings, not Econ

Retail sales, housing and industrial production are prominent in the week. Truth be told, it is the earnings releases that will dominate the markets, rather than economic releases.

The Commerce Department's retail sales report will be released at 8:30 a.m. Eastern on Monday. This is the broadest measure of retail activity and shows whether Americans are returning to the shopping aisles or continuing their course of frugality and debt reduction.

The most significant of the housing reports, existing home sales, will be out at 10 a.m. on Thursday. The housing sector has been lagging the economic recovery. An unexpectedly high number here will mean that the recovery is picking up some breadth.

Other housing reports: The Homebuilders' housing market index at 10 a.m. on Monday is a broad measure of housing activity; and housing starts at 8:30 a.m. on Tuesday tracks the beginning of new home construction -- it is a leading indicator, the builders hope, for future new home sales.

The Federal Reserve's industrial production report is scheduled for 9:15 a.m. on Tuesday. Softness here means the recovery may be failing to take hold.

The Philadelphia Fed Survey of market conditions in the mid-Atlantic region, out at 10 a.m. Thursday, is considered to be a good stand-in for the economy as a whole.

Weekly jobless claims will be released at 8:30 a.m. Thursday. This report always grabs headlines. Personally, I'm not so sure that it is of great significance to the economy and markets. I mean, anyone who is going to be laid off has already been laid off, for the most part, yes? New jobless claims at this point are hardly representative of broad trends. That's my theory, at least.

Other reports of interest:

-- Monday: The Empire State (New York) manufacturing survey at 8:30 a.m., Treasury's report tracking capital flows into and out of the country at 9 a.m., and business inventories at 10 a.m.

-- Wednesday: Petroleum inventories at 10:30 a.m.

-- Thursday: Leading indicators -- my favorite minor report -- at 10 a.m.

Two Fedsters take to the podium, both on Monday:

Cleveland Fed Pres. Sandra Pianalto, a member of the Federal Open Market Committee, speaks at 12:30 p.m. Her resume shows institutional ties early on to the U.S. House Budget Committee. After that, she rose through the Fed system.

St. Louis Fed Pres. James Bullard, an FOMC alternate, speaks at 3:30 p.m. He also is a child of the Fed.

Both took office under President George W. Bush.

Practical trading:

By my rules, as of Monday I can trade May calendar, butterfly and vertical spreads, covered calls and diagonal spreads and iron condors, and July single options and straddles. Of course, shares are good at any time.

Good trading!

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