Sunday, August 5, 2012

The Week Ahead: International trade

International trade -- how much more we're buying from abroad than other countries are buying from us -- tops the list of econ reports during a very slow week. The report will be out at 8:30 a.m. Eastern on Thursday.

Lower oil prices have been narrowing the trade deficit of late, so that volatile daily market may be a better indicator of how this part of the econ picture is faring.

It is possible that two appearances by Fed Chairman Ben Bernanke will trump international trade in market impact. Bernanke appears before two groups, a conference of researchers into income and wealth at 9 a.m. Monday and by video to a town hall meeting of educators from across the country at 2:30 p.m. Tuesday.

Given Bernanke's open and disciplined approach to messaging, I would be surprised if he committed news. He has set up many mechanisms to signal his money supply goals from within the Fed, and really doesn't utilize outside groups for messaging purposes.

Leading indicators out this week:

Average weekly initial jobless claims will be reported at 8:30 a.m. Thursday.

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.

Also, I like to keep an eye on the Baltic dry index of world shipping, updated daily.

Other reports of interest:

Wednesday: Labor efficiency (productivity and costs), at 8:30 a.m., and petroleum inventories, at 10:30 a.m. Also, the 10-year Treasury note auction at 1 p.m.

Friday: Import and export prices, a measure of how competitively American goods are priced compared to the competition, at 8:30 a.m., and the Treasury budget, which tells how large the federal budget deficit is, at 2 p.m. The latter report will be the occasion of political messaging.

Trading calendar

By my rules, as of Monday I can trade September verticals and November single options and straddles. Of course, shares are good at any time.

Good trading!

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