Sunday, December 29, 2013

The Week Ahead: New Year omens and manufacturing

The week's major events come more from the calendar than from the econ reporting. Thursday, Jan. 2, is the first trading day of 2014, and the market's soothsayers and shamans will examine it closely for omens of the course prices will take in the ensuing year.

One major report is due out: The Institute of Supply Management manufacturing survey will be released, also on Thursday, at 10 a.m.

U.S. markets will be closed New Year's Day on Wednesday, and will close early, at 2 p.m. New York time, on Tuesday. The other Big 4 markets -- London, Tokyo and Sydney -- will also be closed on 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.

Vendor performance, also called the deliveries times index, from the ISM 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. 

Other reports of interest:

Monday: Pending home sales at 10 a.m. and the Dallas Federal Reserve manufacturing survey of conditions in Texas at 10:30 a.m.

Tuesday: The S&P Case-Shiller home price index, with separate data for each major metropolitan area, at 9 a.m., the Chicago Purchasing Managers' index at 9:45 a.m. and the consumer confidence report at 10 a.m.

Thursday: The Purchasing Managers' manufacturing index shortly before 9 a.m. and construction spending at 10 a.m.

Friday: Motor vehicle sales throughout the day and petroleum inventories at 11 a.m.; moved from Wednesday because of the New Year's Day holiday.


The Federal Reserve System glitterati awaken from their holiday naps, with four taking to the podium.

Outgoing Federal Reserve Chair Ben Bernanke on Friday addresses the American Economic Association meeting in Chicago at 2:30 p.m. New  York time. The speech is entitled, "The Changing Federal Reserve: Past, Present, Future".

Also speaking on Friday are Fed Gov. Jeremy Stein, a member of the Federal Open Market Committee, Philadelphia Fed Pres. Charles Plosser, an FOMC alternate, and Richmond Fed Pres. Jeffrey Lacker, who has no FOMC position this year. Plosser speaks twice.

Analytical universe

This week I shall be analyzing new bull and bear signals among 2,362 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 February 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 April options for single calls and puts as well as straddles. Shares, of course, are good at any time.

Happy New Year, and good trading

No comments:

Post a Comment