Saturday, November 9, 2013

The Week Ahead: Trade and Industry

Monday is the Veterans Day holiday in the United States. Banks and the bond market will be closed, but the stock exchanges will be open for trading.

Two major reports dominate the week:

The international trade report will be released Thursday at 8:30 a.m. New York time. It provides figures on the trade deficit -- how much more are we buying from other countries than we're selling to them.

Industrial production statistics, which show not only output but also the proportion of capacity that's being used, will be released at 9:15 a.m. on Friday. It's a key measure of the economic recovery.

Speaking of recovery, Matthew C. Klein at Bloomberg has posted an excellent interactive graphic that provides tons of useful perspective on nature of the jobs recovery. It's called "What the Jobs Report Really Means" .

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. 

Other reports of interest:

Wednesday: Treasury budget at 2 p.m.

Thursday: Productivity and costs at 8:30 a.m. and petroleum inventories at 11 a.m.

Friday: Import and export prices and the Empire State manufacturing survey of New York business activity, both at 8:30 a.m.


Fed Chairman Ben Bernanke speaks to educators at 7 p.m. Wednesday. He plans to discuss the history of the Federal Reserve and to take questions from the audience.

No Federal Open Market Committee members besides Bernanke plan public appearances during the week.

Three FOMC alternates will take to the podium: Dallas Fed Pres. Richard Fisher and Minneapolis Fed Pres. Narayana Kocherlakota, both on Monday, and Philadelphia Fed Pres. Charles Plosser on Thursday.

One other Fed grandee has announced a public appearance: Atlanta Fed Pres. Dennis Lockhart on Monday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 2,378 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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