Sunday, April 6, 2014

The Week Ahead: Producer prices, money policy minutes

Two major events punctuate the week: The release of the producer price index at 8:30 a.m. New York time on Friday, and the Federal Open Market Committee minutes on Wednesday at 2 p.m.

The minutes will provide details of the March 19 FOMC meeting, which issued a statement that both jobs and inflationary prospects would be considered in setting the Federal funds rate, drawing a dissent from one member, Minneapolis Fed Pres. Narayana Kocherlakota.

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. 

The index of consumer expectations from the Reuters/University of Michigan consumer sentiment report, at 9:55 a.m. on Friday.

Other reports of interest:

Wednesday: Petroleum inventories at 10:30 a.m.

Thursday:  The Treasury budget at 2 p.m. and the Federal Reserve money supply report at 4:30 p.m.

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

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


Three Federal Open Market Committee members members take to the podium during the week: Minneapolis Fed Pres. Narayana Kocherlakota and Philadelphia Fed Pres. Charles Plosser on Tuesday and Fed Gov. Daniel Tarullo on Wednesday.

One FOMC alternate, Chicago Fed Pres. Charles Evans, has scheduled public appearances, on Wednesday and Thursday

On Tuesday, Federal Reserve General Counsel Scott Alvarez testifies at 10 a.m. before the House Committee on Financial Services on the subject of regulatory rule-making, and the Federal Reserve Board holds an open meeting at 4 p.m. about rule-making on the supplementary leverage ratio, a measure of capital adequacy in banks.

Analytical universe

This week I shall be analyzing new bull and bear signals among 3,866 small-cap and larger stocks and exchange-traded funds.

Trading calendar

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

Good trading.

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