Sunday, July 8, 2012

The Week Ahead: Global trade and producer inflation

There are two blockbuster econ reports this week.

International trade, out at 8:30 a.m. Eastern  on Wednesday, gives numbers on the trade deficit, which these days mainly works out to how much more are we buying from China than we're selling to them.

The producer price index, at 8:30 a.m. on Friday, can be described as inflation earlier in the process, before it hits consumers. It measures price from the viewpoint of the makers of goods and services, rather than from that of retail sales to consumers.

Leading indicators out this week:

Thursday: Weekly unemployment compensation claims at 8:30 a.m.

Friday: The index of consumer of expectations from the Reuters/University of Michigan consumer sentiment report, at 9:55 a.m.

Traders should also keep an eye on these financial leading indicators: The M2 money supply, out Thursday at 4:30 p.m. from the Federal Reserve, and two reported continually during market hours: The S&P 500 index and the interest rate spread between 10-year Treasuries and the federal funds rate.

Other reports of interest:

Wednesday: Petroleum inventories at 10:30 a.m., and the minutes of the June 20 Federal Open Market Committee meeting, at 2 p.m. 

Thursday: Import and export prices at 8:30 a.m., and the Treasury budget, showing the federal deficit, at 2 p.m.


Federal Open Market Committee members: Atlanta Fed Pres Dennis Lockhart at 1:30 p.m. and San Francisco Fed Pres John Williams at 11:55 a.m. Monday and 3:40 p.m. Thursday

FOMC alternate: Chicago Fed Pres Charles Evans at 1 a.m. Monday (He's in Bangkok, hence the strange hour.)

Trading calendar

By my rules, as of Monday I can trade August vertical and butterfly spreads, the short legs of diagonal spreads, and iron condors, and October single options and straddles. Of course, shares are good at any time.

Good trading!

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