Sunday, December 30, 2012

The Week Ahead: Jobs, Leading Indicators

The first week of 2013 will be dominated by the last release 2012 jobs data, on Friday at 8:30 a.m. Eastern.

The employment/unemployment report is, overall, a trailing indicator, although it includes one important leading indicator. Also, look for two more leading indicators, from the Institute of Supply Management manufacturing survey, out at 10 a.m. Wednesday, the factory orders report, released Friday at 10 a.m.

My theory is that it is the leading indicators that count -- the rest of the economic indicator zoo is just for entertainment -- so this is a big week for traders trying to peer into the misty future.

The U.S. central bank will kick off the year in monetary policy by release Federal Open Market Committee minutes from the Dec. 12 meeting at 2 p.m. Wednesday.

The week will see the customary prelude to the jobs report, with the payroll company ADP's employment report released on Thursday at 8:15 a.m.

The markets will be closed Tuesday for New Year's Day, the one totally global financial holiday of the year.

If Congress fails to act, Wednesday will be the first workday after across-the-board U.S. government budget cuts kick in -- the Fiscal Cliff -- and also after the U.S. hits its debt ceiling, although the latter will be mitigated by some fancy footwork at the Treasury Department to buy a few months extra time.

Also this week, we at Private Trader will bring some new analytical tools online. My goal is to roll them out on Wednesday Monday, Jan. 7.

Leading indicators out this week (in descending 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  from the employment report, at 8:30 a.m. Friday.

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

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

Vendor performance -- the delivery time index -- from the ISM manufacturing survey, at 10 a.m. Wednesday.

Average weekly initial jobless claims, at 8:30 a.m. Thursday.

Manufacturers' new orders for non-defense capital goods from the factory orders report, at 10 a.m. Friday.

Other reports of interest:

Monday: Dallas Fed manufacturing survey in Texas, 10:30 a.m.

Wednesday: Motor vehicle sales throughout the day, purchasing managers index just before 9 a.m. and construction spending at 10 a.m.

Thursday: Challenger job-cut report at 7:30 a.m. and  petroleum inventories at 11 a.m.

Friday: Monster (.com) employment index of online job demand, time unspecified.

Trading calendar

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

Happy New Year, and good trading this week and throughout 2013!

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