Saturday, August 16, 2014

The Week Ahead: Prices, Houses, Jackson Hole

Inflation and housing will be the focus of a rather slow-cooking stew of economic reports, with a couple of dashes of seasoning from the Federal Reserve.

The consumer price index, the primary measure of inflation and deflation, and housing starts, the premier forward-looking gauge of the real-estate markets, will both be published Tuesday at 8:30 a.m. New York time.

A second housing report, new home sales, will  be released Thursday at 10 a.m.

A fourth report with market-moving potential, the Philadelphia Federal Reserve survey of business conditions in the mid-Atlantic region, is also scheduled for 10 a.m. Thursday.

Federal Reserve Chair Janet Yellen addresses the Kansas City Fed's Economic Symposium in Jackson Hole, Wyoming at 10 a.m. Friday. This year's topic: Re-evaluating labor market dynamics.

And on Wednesday, Federal Open Market Committee minutes of the July 30 meeting will be made public Wednesday at 10 a.m. The minutes are useful for the nuance they bring to the art of Fed watching.

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. 

Building permits for new private homes from the housing starts report, at 8:30 a.m. Tuesday.

The leading indicators report, while itself not a leading indicator, aggregates the leaders into a single number that I find useful as a "You Are Here" marker for the economic cycle. It will be published Thursday at 10 a.m.

Other items of interest:

Monday: The Homebuilders' housing market index at 10 a.m.

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

Thursday: The PMI manufacturing index flash report at 9:45 a.m.

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


Along with Chair Yellen, the Federal Reserve glitterati are sure to be focused on the Jackson Hole symposium. The full program will be available at 8 p.m. Thursday New York time. The KC Feds Jackson Hole symposiums page may be found here.

Analytical universe

This week through Tuesday I shall be analyzing new bull and bear signals among 261 large-cap and exchange-traded funds, a smaller pool than usual in order to lesson processing time while I travel in East Asia. Beginning with the analysis of Wednesday's session, I'll return to the full universe of 3,928 symbols.

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, Fukuoka, Japan, Aug. 16, 2014 New York time

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