Monday, September 1, 2014

The Week Ahead: Jobs, trade, manufacturing, and Beige

The Labor Department's employment report, including the politically important unemployment rate, dominates the week. It will be published on Friday at 8:30 a.m. New York time, with a preview prepared by a private-sector payroll company, the ADP employment report, to be released Wednesday at 8:15 a.m.

Two other potential market movers are on the calendar: The Institute of Supply Management manufacturing survey, out Monday at 10 a.m., and the international trade report, out Thursday at 8:30 a.m.

The U.S. markets reopen on Tuesday following a three-day weekend in the United States marking Labor Day. The other money centers -- London, Tokyo and Sydney -- were open as usual on Monday.

Leading indicators (in descending order of importance):

The average hourly workweek in manufacturing from the employment report, at 8:30 a.m. Friday.

Manufacturers new orders for consumer good and materials, from the factory orders report, at 10 a.m. Wednesday.

Vendor performance, also known as the deliveries time index, from the ISM manufacturing survey, at 10 a.m. Tuesday.

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. 

Manufacturers new orders for non-defense capital goods from factory orders, at 10 a.m. Wednesday.

Other items of interest:

Monday: Purchasing Managers Institute manufacturing index at 9:45 a.m. and construction spending at 10 a.m.

Tuesday: Factory orders at 10 a.m. and the Federal Reserve Beige Book of economic conditions in each of its regions at 2 p.m.

Thursday:  Productivity and costs at 8:30 a.m., the Institute of Supply Management non-manufacturing survey at 10 a.m. and petroleum inventories at 11 a.m.

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


Release of the Beige Book, which happens on Wednesday at 2 p.m., attracts the Federal Reserve glitterati like cheese attracts mice.

Four Federal Open Market Committee members take to the podium: Fed Gov. Jerome Powell, Cleveland Fed Pres. Loretta Mester, and Minneapolis Fed Pres. Narayana Kocherlakota on Thursday, and Philadelphia Fed Pres. Charles Plosser on Friday.

Boston Fed Pres. Eric Rosengren, who has no seat on the money-policy body at present, also is scheduled to give a speech on Friday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 3,929 small-cap and larger stocks and exchange-traded funds.

Trading calendar

By my rules, I'm trading October 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, Sept. 1, 2014

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