Sunday, September 14, 2014

The Week Ahead: Money policy, inflation, industry and housing

Industry, inflation, housing and the value of a dollar dominate the week, as the Federal Open Market Committee meets for two days to consider the course of the economy, with the FOMC announcement followed by a news conference with Fed Chair Janet Yellen.

The FOMC announcement on Wednesday at 2 p.m. New York time will be accompanied by a fresh batch of forecasts from the committee's members. Yellen meets with reporters half an hour later.

The monetary policy meeting is embedded in a wide range of economic reports.

Industrial production will be published on Monday at 9:15 a.m. , followed by two price reports: The producer price index on Tuesday and the consumer price index on Wednesday, both at 8:30 a.m.

On Thursday, housing starts are scheduled for release at 8:30 a.m., and the Philadelphia Federal Reserve survey of conditions in the mid-Atlantic states on Thursday 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. 

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

The index of leading indicators, although not itself a leading indicator, provides a composite score for the leaders. It will be published Friday at 10 a.m.

Other items of interest:

Monday: The Empire State manufacturing survey of conditions in New York at 8:30 a.m.

Treasury: The Treasury international capital report tracking inflows and outflows between the U.S. and other countries.

Wednesday:  The Homebuilders' housing market index at 10 a.m. and petroleum inventories at 10:30 a.m.

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


The Federal Reserve glitterati traditionally leave the spotlight to the Federal Open Market Committee when they meet, and this week is no exception. All are laying low except for Wednesday's announcement, forecasts and news conference.

Analytical universe

This week I shall be analyzing new bull and bear signals among 3,962 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. 14, 2014

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