Sunday, September 23, 2012

The Week Ahead: Income, Outlays, Durables

How much we made, how much of that we spent and how much we socked away dominates the econ week, along with a report on orders for big-ticket items, an important measure of confidence in future growth.

Personal income and outlays will be reported at 8:30 a.m. Eastern on Friday. Durable goods orders will be released the day before, on Thursday, also at 8:30 a.m.

I treat durable goods as a confidence indicator because families and companies don't buy big, expensive things unless they think they'll have the paycheck and business to pay for them and put them to use. Fear is a harsh climate for durable goods.

Leading indicators out this week:

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

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

Traders also keep track of 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.


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

Other reports of interest:

Monday: The Dallas Fed manufacturing survey of business activity in Texas, at 10:30 a.m.

Tuesday: The S&P Case-Shiller home price index of housing prices in 20 metro areas, at 9 a.m. and the Conference Board consumer confidence index at 10 a.m.

Wednesday: New home sales at 10 a.m. and petroleum inventories at 10:30 a.m.

Thursday: The 2nd quarter final report on gross domestic product at 8:30 a.m. (important only in the event of a major, unexpected revision) and pending home sales at 10 a.m.

Friday:  Chicago Purchasing Managers index at 9:45 a.m.

Trading calendar

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

Good trading!

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