The Week Ahead: Prices, retails sales

Having reported on jobs last week, the U.S. government this week begins its two-part study of prices, thereby covering the twin legs of the Federal Reserves mandate: Low inflation and low unemployment.

The producer price index will be released Friday at 8:30 a.m. New York time. Its companion report, the consumer price index, will be released on Tuesday, Sept. 17, the week after. The PPI gives stats on the prices manufacturers receive for their output.

The producer price index used to be called the wholesale price index, which seems like a better name to me. If prices are up for wholesalers, the argument goes, then they'll be up for retailers downstream and eventually, for consumers.

A second major report, retail sales, will also be released at 8:30 a.m. on Friday. It tracks how consumers are reacting to the economy -- are we inclined to shop till we drop or are we stuffing cash under our mattresses.

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.

The Reuters/University of Michigan consumer sentiment report, at 9:55 a.m. Friday.

Other reports of interest:

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

Thursday: Import and export prices at 8:30 a.m., and the Treasury budget, showing the deficit, at 2 p.m.

Friday: Business inventories at 10 a.m.

Fedsters

San Francisco Fed Pres. John Williams speaks on Monday. He doesn't have a seat on the Federal Open Market Committee this year, neither as a member nor an alternate.

Analytical universe

This week I shall be analyzing new bull and bear signals among 2,339 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 October options for the short legs of vertical, diagonal and calendar spreads and covered calls, and for all legs of butterfly spreads and iron condors. I'm trading December options for single calls and puts. Shares, of course, are good at any time.

Good trading!