Sunday, July 6, 2014

The Week Ahead: FOMC minutes

Minutes of the June Federal Open Market Committee meeting will be released Wednesday at 2 p.m. New York time.

The FOMC statement following that meeting said that the Fed's "sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative."

Translation: The Fed isn't going to end the low-interest-rate party anytime soon. The markets were cheered.

The minutes will add nuance to the June statement and Fed Chair Janet Yellen's reinforcement of it at her post-meeting news conference.

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.

Average hourly workweek in manufacturing from the employment report, at 8:30 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 items of interest:

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

Friday: Treasury budget, detailing the deficit, at 2 p.m.

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


Three Federal Open Market Committee members have scheduled public apperances: Minneapolis Fed Pres. Narayana Kocherlakota on Tuesday, Fed Gov. Stanley Fischer on Thursday and Philadelphia Fed Pres. Charles Plosser on Friday.

Two FOMC alternates will speak: Richmond Fed Pres. Jeffrey Lacker on Tuesday and Chicago Fed Pres. Charles Evans on Friday.

One other of the Fed glitterati will take to the podium: Kansas City Fed Pres. Esther George on Thursday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 3,925 small-cap and larger stocks and exchange-traded funds.

Trading calendar

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

Good trading.

-- Tim Bovee, Portland, Oregon, July 6, 2014

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