Sunday, November 30, 2014

The Week Ahead: Jobs, trade, manufacturing, Beige

The Labor Department reports on employment, including the politically important unemployment rate, at 8:30 a.m. New York time on Friday. A leading private-sector payroll company releases a sneak preview, the ADP employment report, on Wednesday at 8:15 a.m.

The jobs report is buttressed by two other potential market movers: The Institute of Supply Management manufacturing survey on Monday at 10 a.m. and international trade on Friday at 8:30 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.

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

Vendor performance, also called the deliveries time index, from the Institute of Supply Management manufacturing survey, at 10 a.m. Monday.

The S&P 500 index, reported continually during market hours.

Average weekly initial jobless claims, at 8:30 a.m. Thursday. 

Other items of interest:

Monday: The Purchasing Managers Institute manufacturing index at 8:45 a.m.

Tuesday: Motor vehicle sales throughout the day and construction spending at 10 a.m.

Wednesday: Productivity and costs at 8:30 a.m., petroleum inventories at 10:30 a.m. and the Federal Reserve Beige Book at 2 p.m.

Friday: Factory orders at 10 a.m.

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

Treasury Debt

  • 4-week: Announcement Monday 11 a.m., auction Tuesday 11:30 a.m., settlement Thursday
  • 3-month: Auction Monday 11:30 a.m., announcement Thursday 11 a.m.
  • 6-month: Auction Monday 11:30 a.m., announcement Thursday 11 a.m.
  • 52-week: Announcement Thursday 11 a.m.
  • 2-year: Settlement Monday
  • 3-year: Announcement Thursday 11 a.m.,
  • 5-year: Settlement Monday
  • 7-year: Settlement Monday
  • 10-year; Announcement Thursday 11 a.m.
  • 30-year: Announcement Thursday 11 a.m.
  • None

It's Beige Book week at the Federal Reserve, a twice-a-quarterly event that never fails to bring the money-policy glittearati to the speaker's podium. The document will be out Wednesday afternoon.

Fed Gov. Lael Brainard, a member of the Federal Open Market Committee, gives two speeches on the subject of financial stability, at the Hutchins Center on Fiscal and Monetary Policy on Wednesday and to the Federal Reserve Bank of Cleveland and Office of Financial Research Conference on Thursday at 1:15 p.m. Both are in Washington.

I'm especially struck by the title of the Thursday appearance, "Measurement Challenges in Macroprudential Policy Implementation: Essential Data Elements for Preserving Financial Stability". Which I translate as, "How do you figure out when to clamp down on the economy when you can't entirely trust the data". Sounds interesting.

She also makes a speech in Los Angeles on Tuesday.

Other FOMC members with scheduled appearances are New York Fed Pres. William Dudley on Monday, Fed Gov. Stanley Fischer  on Monday, Tuesday and Friday, Philadelphia Fed Pres. Charles Plosser and Dallas Fed Pres. Richard Fisher on Wednesday and Cleveland Fed Pres. Loretta Mester on Thursday and Friday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 1,299 mid-cap and larger stocks and exchange-traded funds.

Trading calendar

By my rules for shorter-term trades, I'm trading January 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 March 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, Nov. 28, 2014

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