Sunday, October 12, 2014

The Week Ahead: Housing, Yellen, prices and more

A potpourri of reports punctuates a week made complicated by a semi-holiday on Monday: U.S. stocks and futures will trade on the Columbus Day holiday, but the bond market will be closed.

The housing starts report, to be published Friday at 8:30 a.m. New York time, dominates the week. It is a forward looking report used to forecast builders' assessment of likely sales and the inventory of new homes that will be available for sales.

In addition, the economic reports having some market-moving potential: Producer prices and retail sales, both on Wednesday at 8:30 a.m., and industrial production at 9:15 a.m. and the Philadelphia Federal Reserve survey at 10 a.m., both on Thursday.

Federal Reserve Chair Janet Yellen addresses the Boston Fed's Economic Conference on the subject of economic inequality, on Friday at 8:35 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 average hourly workweek in manufacturing from the employment report, at 8:30 a.m. Friday.

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, Friday at 8:30 a.m.

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

Other items of interest:

Wednesday; The Empire State manufacturing survey of conditions in New York at 8:30 a.m., business inventories at 10 a.m., and the Beige Book survey of conditions in each Federal Reserve district.

Thursday: The Homebuilders' housing market index at 10 a.m., petroleum inventories at 11 a.m., and the Treasury Department international capital report tracking financial inflows and outflows from abroad at 4 p.m.

Friday: Reuters/University of Michigan consumer sentiment report at 9:55 a.m.

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


Beige Book week never fails to flush a few of the Federal Reserve glitterati out of the brush.

In addition to Federal Reserve Chair Janet Yellen, two Federal Open Market Committee members have scheduled appearances: Philadelphia Fed Pres. Charles Plosser on Monday, and Minneapolis Fed Pres. Narayana Kocherlakota on Thursday.

An FOMC alternate, Chicago Fed Pres. Charles Evans speaks on Monday.

Two other Fedsters unaffiliated with the FOMC this year will speak: Kansas City Fed Pres. Esther George, and St. Louis Fed Pres. James Bullard on Thursday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 1,284 mid-cap and larger stocks and exchange-traded funds.

Trading calendar

By my rules, I'm trading November 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 January 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, Oct. 12, 2014

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