Sunday, November 3, 2013

The Week Ahead: Jobs, factory orders, Chairman Ben

The October employment and unemployment report will be released on Friday at 8:30 a.m. New York time, a week late due to the recent 16-day shutdown of many federal agencies in a funding dispute within Congress.

Normally the biggest American payroll services company, ADP, provides a sneak preview to the numbers on Wednesday in its own employment report. This time, the preview came early, since the ADP employment report was published last week on the normal schedule.

Everything ought to be back in sync when the November jobs numbers are released on Dec. 7. Knock on wood.

Two other major reports will punctuate the trading week. Personal income and outlays will be published Friday at 8:30 a.m. It is from these numbers that the important savings rate is calculated, important because economists agree that consumer spending will be the engine that powers the recovery.

The third and presumably most accurate attempt to calculate gross domestic product for the 2nd quarter will be published Thursday at 8:30 a.m.

Federal Reserve Chairman Ben Bernanke speaks as part of a panel discussion on Friday at 3:30 p.m. at an International Monetary Fund research conference. The topic is "The Crisis as a Classic Financial Panic". Newsworthy? No idea. Interesting? Sounds like it.

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.

Manufacturers' new orders for consumer goods and materials from two factory orders reports that will be released simultaneously, for August and September, at 10 a.m. Monday. The reporting schedule was disrupted  by the government shutdown.

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

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

The index of consumer expectations from the Reuters/University of Michigan consumer sentiment report, at 8:55 a.m. Friday.

Other reports of interest:

Tuesday: Institute of Supply Management non-manufacturing index at 10 a.m.

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


Bernanke aside, three Federal Open Market Committee members have scheduled appearances: Fed Gov. Jerome Powell and Boston Fed Pres Eric Rosengren on Monday and Fed Gov. Jeremy Stein on Thursday.

One FOMC alternate, Cleveland Fed Pres. Sandra Pianalto, speaks on Wednesday.

Other top Fed officials taking to the platform are Richmond Fed Pres. Jeffrey Lacker and San Francisco Fed Pres. John Williams on Tuesday, and Atlanta Fed Pres. Dennis Lockhart, and Williams again, on Friday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 2,376 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 December 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 February options for single calls and puts as well as straddles. Shares, of course, are good at any time.

Good trading!

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