Friday, July 26, 2013

The Week Ahead: GDP + JOBS = FOMC

Two of the big guns of economic reporting roll out this week: The first report of gross domestic product for the 2nd quarter at 8:30 a.m. New York Time on Wednesday, and the employment report at 8:30 a.m. on Friday.

This is the first of three 2nd quarter GDP reports. It, and the monthly jobs numbers, play into the discussion over when to ease up on monetary stimulus, and that decision in turn will do much to determine the sort of market traders will face in the remaining months of the year.

And speaking of the monetary policy, the Federal Open Market Committee concludes a two-day meeting on Wednesday and will issue a statement at 2 p.m.

The jobs figures will get a sneak preview when the ADP employment report is released by the leading U.S. payroll company, at 8:15 a.m. Wednesday.

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 average hourly work week in manufacturing from the employment report, at 8:30 a.m. Friday.

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

Vendor performance (the delivery times index) from the Institute of Supply Management manufacturing survey, at 10 a.m. Thursday.

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

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

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

Other reports of interest:

Monday: Pending homes sales at 10 a.m. and the Dallas Fed manufacturing survey of conditions in Texas at 10:30 a.m.

Tuesday: The S&P Case-Shiller home price index in 20 metro areas at 9 a.m. and the consumer confidence report at 10 a.m.

Wednesday: The employment cost index, which includes benefits as well as wages and salaries, at 8:30 a.m., the Chicago purchasing managers index at 9:45 a.m. and  petroleum inventories at 10:30 a.m.

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

Friday: Personal income and outlays at 8:30 a.m.

Analytical universe

This week I'll be analyzing new bull and bear signals among 2,334 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 September options for the short legs of vertical spreads and November options for single calls and puts. Of course, shares are good at any time.

Posting schedule

I am traveling in East Asia this, and during that period I'll adjust my posting schedule to conform to local time. Analyses of individual stocks and my daily prospects list will be posted after the markets close in New York and sometimes deep in the night U.S. time. I won't post on travel days.

Good trading!

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