Sunday, April 27, 2014

The Week Ahead: Big fireworks, including jobs, GDP and the FOMC.

The big fireworks of economics reporting shoot skyward this week. They are certain to give traders cause to look up from narrower concerns such as earnings to the farther horizons of the business cycle.

The gross domestic product provides a first look at 1st quarter growth, on Wednesday at 8:30 a.m. New York time, followed the same day at 2 p.m. by the Federal Open Market Committee announcement of money-policy decisions.

Personal income and outlays will be released on Thursday at 8:30 a.m., followed the same day at 10 a.m. by the Institute of Supply Management manufacturing index.

And on Friday at 8:30 a.m. comes the grand finale, the employment report, including the headline generating unemployment rate. It will be the subject of a sneak preview when the payroll-based ADP employment report is made public Wednesday at 8:15 a.m.

And Federal Reserve Chair Janet Yellen gives a speech on community bank supervision at Thursday at 8:30 a.m.

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 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, at 10 a.m. Friday.

Vendor performance, or the delivery times index from the Institute of Supply Management manufacturing index, 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. 

Manufacturers' new orders for non-defense capital goods, from the factory orders report, at 10 a.m. Friday.

Other reports of interest:

Monday: The pending home sales index at 10 a.m. and the Dallas Federal Reserve manufacturing survey at 10:30 a.m.

Tuesday: The S&P Case-Shiller home price index, a survey of 20 metropolitan areas, at 9 a.m., and consumer confidence at 10 a.m.

Wednesday: The employment cost index at 8:30 a.m., the Chicago Purchasing Managers index at 9:45 a.m. and petroleum inventories at 10:30 a.m.

Thursday:  Motor vehicle sales throughout the day, the Purchasing Managers Institute manufacturing index at 9:45 a.m., construction spending at 10 a.m. and the Federal Reserve money supply report at 4:30 p.m.

Friday: Factory orders at 10 a.m.

I also keep an eye on the Baltic Dry Index, updated daily.


Yellen aside, the Federal Reserve glitterati are silent this week.

Analytical universe

This week I shall be analyzing new bull and bear signals among 3,901 small-cap and larger stocks and exchange-traded funds.

Trading calendar

By my rules, I'm trading June 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 August options for single calls and puts as well as straddles. Shares, of course, are good at any time.

Good trading.

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