Sunday, August 24, 2014

The Week Ahead: GDP, big-ticket items, income/spending

A trio of heavy hitters are lined up for the economic reporting week.

Durable goods orders, which tracks the market for big, expensive products, leads off on Tuesday, followed by a second estimate of the 2nd quarter gross domestic product on Thursday. Personal income and outlays, from which the savings rate can be calculated, cap the week on Friday. All three reports will be published at 8:30 a.m. New York time.

The real-estate sector will also have a report that can sometimes move markets, new home sales, out Monday 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 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: The Dallas Federal Reserve Bank manufacturing survey on conditions in Texas at 10:30 a.m. As goes Texas, so goes the nation! Don't believe it? Ask any Texan.

Tuesday: The Standard & Poors Case-Shiller home price index broken down to 20 metroplitan areas at 9 a.m. All real estate is local, and this is the most local timely national report around. Also, the Conference Board consumer confidence report at 10 a.m.

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

Thursday: The pending home sales index at 10 a.m. "Pending" here means contracted but not closed.

Friday: The Chicago Purchasing Managers Index at 9:45 a.m. and 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.


It's silent running among the Federal Reserve glitterati this week, as the big names rest up after their grueling two-day conference at Jackson Hole, Wyoming, the big event of the Fed's social calendar. Tough job, but someone has to do it.

Analytical universe

This week I shall be analyzing new bull and bear signals among 3,921 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 December 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 Aug. 24, 2014

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