Sunday, December 2, 2012

The Week Ahead: Jobs

It's jobs week as the Labor Department on Friday releases its comprehensive employment and unemployment statistics, at 8:30 a.m. Eastern.

These numbers, the most politically charged of the economics reporting cycle, to me always seem to be like a clothes washer, because their reporting is always followed by a Washington spin cycle.

During the elections those who wanted to paint the Obama administration as a disaster always drew the most negative conclusions, while administration supporters always found signs of hope. Now that the election is over, it will be politically fascinating (although a market yawner) to see how the various factions in Washington respond.

The other bookend for the week is the Institute of Supply Management's manufacturing index, out Monday at 10 a.m. The index tipped back toward toward expansion the last two months, and a continuation and strengthening of that trend would suggest the recovery truly is taking hold.

Leading indicators out this week (in 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, moved to Friday 4:30 p.m. because of the holiday, from the Federal Reserve.

The average hourly workweek in manufacturing, taken from Labor's employment report at 8:30 a.m. Friday.

Manufacturers' new orders for consumer goods and materials, from the factory orders report out Wednesday at 10 a.m.

Vendor performance (delivery times index), a part of the Institute of Supply Management's manufacturing index, released Monday at 10 a.m.

The S&P 500 index, reported continually during market hours.

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

Manufacturers' new orders for nondefense capital goods, from the factory orders report Wednesday at 10 a.m.

Average weekly initial jobless claims, at 8:30 a.m. Wednesday, a day earlier than usual because of the holiday.

Other reports of interest:

Monday: Construction spending at 10 a.m.

Tuesday: Motor vehicle sales throughout the day.

Wednesday: The ADP employment report, based on payrolls, at 8:15 a.m.; productivity and costs at 8:30 a.m.; factory orders and the ISM non-manufacturing index, both at 10 a.m.; and petroleum inventories at 10:30 a.m.

Friday: Consumer sentiment at 9:55 a.m.

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


St. Louis Fed Pres. James Bullard, an alternate on the Federal Open Market Committee, gives a speech on Monday.

Trading calendar

By my rules, as of Monday I can trade January short vertical spreads and March single options and straddles. Of course, shares are good at any time.

Good trading!

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