Sunday, December 8, 2013

The Week Ahead: Retail sales, producer prices

Two reports, retail sales and the producer price index, lead the week in economics reporting. Neither is a major market mover, so traders will be taking their clues from elsewhere.

The retail sales report, out Thursday at 8:30 a.m. New York time, covers November, including the first sliver of the all-important winter holidays shopping season. Within that sliver came Black Friday and the ensuing weekend, but not Cyber Monday.

The producer price index, one of the two major measures of inflation and deflation, will be released Friday at 8:30 a.m. The top prices headliner, consumer prices, will be out the following Tuesday, Dec. 17.

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.

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: Petroleum inventories at 10:30 a.m. and the Treasury budget at 2 p.m.

Thursday: Import and export prices at 8:30 a.m. and business inventories at 10 a.m.


Three Fedsters speak, all on Monday. They are St. Louis Fed Pres. James Bullard, a member of the Federal Open Market Committee; Dallas Fed Pres. Richard Fisher, an FOMC alternate; and Richmond Fed Pres. Jeffrey Lacker, who has no monetary policy role this year.

Analytical universe

This week I shall be analyzing new bull and bear signals among 2,367 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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