Sunday, July 13, 2014

The Week Ahead: Yellen, Beige, retail, industry, housing

Fed Chair Janet Yellen makes her twice-a-year report to Congress amid a week of economic reports ranging from housing to industry.

Yellen  testifies before the Senate Banking, Housing and Urban Affairs Committee on Tuesday and before its House counterpart, the Financial Services Committee, on Wednesday. Both sessions begin at 10 a.m.

The Federal Reserve releases its Beige Book accounting of financial conditions in each the system's 12 districts, on Wednesday at 2 p.m.

Retail sales leads the parade of reports, on Tuesday at 8:30 a.m., followed on Wednesday by producer prices at 8:30 a.m. and industrial production at 9:15 a.m.

On Thursday, housing starts will be published at 8:30 a.m., and the Philadelphia Federal Reserve survey of conditions in the mid-Atlantic Region 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.

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. 

Building permits for new private homes from housing starts at 8:30 a.m. Thursday.

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

Although not itself a leading indicator, the Conference Board leading indicators report provides a useful, one-number compilation of what the leaders say. I always give it a glance. It will be published Friday at 10 a.m.

Other items of interest:

Tuesday: The Empire State manufacturing survey of conditions in New York and the import and export prices report, both at 8:30 a.m., and business inventories at 10 a.m.

Wednesday:  Treasury's international capital report, tracking capital flows into and out of the United States, at 9 a.m., the Home Builders' housing market index at 10 a.m. and  petroleum inventories at 10:30 a.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.


In addition to Yellen's testimony on Tuesday and Wednesday, one other Federal Open Market Committee member is scheduled to make a public appearance, Dallas Fed Pres. Richard Fisher on Wednesday.

One other from among the Fed glitterati will take to the podium, St. Louis Fed Pres. James Bullard on Thursday. He has no role on the FOMC this year.

Analytical universe

This week I shall be analyzing new bull and bear signals among 3,961 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 13, 2014

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