Sunday, December 1, 2013

The Week Ahead: Jobs, GDP and much more

This week is as stuffed with major economic releases as were last Thursday's Thanksgiving turkeys.

The biggest headliner, employment and unemployment numbers, will be released Friday at 8:30 a.m. New York Time. They are a backward-looking indicator but have an important impact in shaping policy, and more important, the political environment in which policy is shaped.

The jobs numbers will have a preview on Wednesday in the closely-watched ADP employment report produced by the payroll company Automatic Data Processing Inc., released at 8:15 a.m.

Not lagging jobs by much in significance are the first revision of the gross domestic product figures for the 3rd quarter, out Thursday at 8:30 a.m. The initial report, released in November, put growth at 2.8%, and if the revision comes in above that, it would signal the the Fed is more likely to reduce economic stimulus sooner rather than later.

Other major reports in the week:

The Institute of Supply Management's manufacturing index, a detailed analysis based on interviews with purchasing managers, will be released at 10 a.m. Monday.

The international trade figures, which includes the U.S. balance of trade, is out Wednesday at 8:30 a.m.

Also Wednesday, two new home sales reports will be published, both at 10 a.m. In addition to the latest report, the Census  Bureau will release the report whose October publication was delayed by the federal government shutdown.

American money habits will get their monthly review at 8:30 a.m. Friday in the personal income and outlays report, which can be used to calculate the savings rate. The more we save, the less we spend, and the less merry the holidays are for the retailers, with their huge impact on both the job market and economic expectations.

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. Friday. (It has been moved from its normal Thursday slot because of the holiday.)

Average hourly workweek in manufacturing from the employment report, at 8:30 a.m. Friday.

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

Vendor performance, also called the deliveries times index, from the Institute of Supply Management manufacturing survey, Monday at 10 a.m.

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 factory orders report, Thursday at 10 a.m.

The index of consumer expectations from the Reuters/University of Michigan consumer sentiment report, at 10 a.m. Friday.

Other reports of interest:

Monday: Purchasing Managers manufacturing index just before 9 a.m. and two construction spending reports at 10 a.m.; in addition to the new report, the Census Bureau will release figures from a month before that were delayed by the federal government shutdown.

Tuesday: Motor vehicle sales figures will be released throughout the day by the manufacturers.

Wednesday: Petroleum inventories at 10:30 a.m. and the Federal Reserve Beige Book at 2 p.m.

Thursday: Factory orders at 10 a.m.

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


Chicago Fed Pres. Charles Evans, a member of the Federal Open Market Committee, makes a public appearance on Friday, as does Philadelphia Fed Pres. Charles Plosser, an FOMC alternate, at 3 p.m.

Analytical universe

This week I shall be analyzing new bull and bear signals among 2,373 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 January 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 March options for single calls and puts as well as straddles. Shares, of course, are good at any time.

Good trading!

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