Saturday, June 15, 2013

The Week Ahead: Fed meeting and inflation stats

The Federal Open Market Committee on Wednesday completes the third of the eight meetings scheduled this year, and the second of the meetings to be followed by forecasts from FOMC members and a news conference by Chairman Bernanke.

The Fed money policy announcement and release of the forecasts will happen at 2 p.m. New York time, followed by Bernanke's news conference at 2:30 p.m.

There has been much speculation in recent weeks about whether the Fed was preparing to tighten a bit to avoid inflation, and so it is fitting that the FOMC meeting follows release of the government's signature inflation measure, the consumer price index, at 8:30 a.m. on Tuesday.

Count on both the CPI and the Fed to generate their share of drama, which won't necessarily be echoed in the markets, but might be.

Real estate gets a pair of major reports: Housing starts on Tuesday at 8:30 a.m. and existing home sales -- the greater part of the market -- on Thursday at 10 a.m.

The Philadelphia Fed survey of conditions in the mid-Atlantic states will cap the week. It's also out Thursday at 10 a.m.

Friday is the last regular trading day before June stock and index options and futures expire, making it a Quadruple Witching Friday. That's one more witch than Shakespeare mustered for Macbeth.

Leading indicators (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, at 4:30 p.m. Thursday.

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

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

Building permits for new private homes from housing starts, Tuesday at 8:30 a.m.

The index of leading indicators is built on the leading indicators I track, but it is not in itself a leading indicator. Still, I find it to be a useful tool in tracking the broader environment in which I trade. It will be published Thursday at 10 a.m.

Other reports of interest:

Monday: Empire State manufacturing survey of conditions in New York, at 8:30 a.m., and the Home Builders housing market index at 10 a.m.

Wednesday: Petroleum inventories at 10:30 a.m.

Thursday: Purchasing Managers' manufacturing index flash report just before 9 a.m. Thursday.

I also follow the Baltic dry index, released daily, tracking the volume of global maritime shipments of coal, iron ore, grain and other raw materials.

Analytical universe

This week I'll be analyzing new bull and bear signals among 2,304 stocks and exchange-traded funds that have some analyst interest. They are traded both on the major U.S. exchanges and over-the-counter. My universe is selected from mid-cap stocks and larger, defined as market capitalization of $1 billion and greater.

Trading calendar

By my rules, I'm trading July options for short vertical  spreads and the short legs of covered calls, iron condors, and calendar, diagonal and butterfly spreads, as well as September options for single calls and puts. Of course, shares are good at any time.

Good trading!

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