Sunday, July 27, 2014

The Week Ahead: Jobs, GDP, the FOMC, Income

Jobs! GDP! The FOMC! Income! For fans of economic reporting, this is Dream Week.

The employment situation report, including the politically important unemployment rate, will be released on Friday at 8:30 a.m. New York time. It will be preceded with a sneak preview on Wednesday at 8:15 a.m. with the ADP employment report, compiled by America's leading payroll processing company.

The gross domestic product release, on Wednesday at 8:30 a.m., will give a first comprehensive look at how the economy fared in the 2nd quarter. The 1st quarter shows a 2.9% decline in GDP, which I found to be quite shocking, although the news coverage didn't back up my opinion, instead treating it as a "black swan" event caused by inclement winter weather. The 2nd quarter number on Wednesday will tell us whether my shock was correct or overly dramatic.

The Federal Open Market Committee meets on Wednesday and will issue its post-meeting statement at 2 p.m. No news conference or member forecasts are scheduled to accompany this meeting.

Personal income and outlays are due out on Friday at 8:30 a.m. The survey numbers allow for calculation of the savings rate, a measure of how willing we are to shop 'till we drop. This is important because free-spending zombie consumers are believed to be a prerequisite for a robust economy.

One other potential market mover is in queue for the week, the Institute of Supply Management manufacturing index, out Friday at 10 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.

Vendor performance, also called the deliveries times index, from the Institute of Supply Management manufacturing survey, at 10 a.m. Friday.

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. Friday.

Other items of interest:

Monday: Pending home sales 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 for 20 metro areas, the most detailed pricing survey for housing, at 9 a.m., and consumer confidence at 10 a.m.

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

Thursday: The employment cost index at 8:30 a.m. and the Chicago Purchasing Managers index at 9:45 a.m.

Friday: Motor vehicle sales all day and construction spending at 10 a.m.

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


As is their habit in weeks when FOMC statements are published, the Federal Reserve glitteratti are lying low and have no scheduled appearances.

Analytical universe

This week I shall be analyzing new bull and bear signals among 3,995 small-cap and larger stocks and exchange-traded funds.

Trading calendar

By my rules, I'm trading September 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 November 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 27, 2014

Creative Commons License

All content on Tim Bovee, Private Trader by Tim Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at

No comments:

Post a Comment