Sunday, November 16, 2014

The Week Ahead: Prices, industry, housing, Fed minutes

Prices and several narrower slices of the economy get their day in the low winter sun this week. The reports queued up for release lack blockbusters, but each has the potential of giving the markets a slight nudge.

The two price reports are producer prices on Tuesday and consumer prices on Thursday, each at 8:30 a.m. New York time. They'll provide some insight into whether inflation -- or deflation -- is kicking in, although the dominant interest in money-creating circles these days is jobs, or their lack.

The sectors line up this way: Industrial production figures will be published Monday at 9:15 a.m., housing starts on Wednesday at 8:30 a.m., and existing home sales and the Philadelphia Federal Reserve survey of economic conditions in the mid-Atlantic region, each on Thursday at 10 a.m.

The Federal Open Market Committee minutes will be released for the last time this year, covering the Oct. 28-29 meeting, on Wednesday at 2 p.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 the housing starts report, at 8:30 a.m. Wednesday.

The leading indicators report, although not a leading indicator itself, distills the leaders into a single index that serves as a useful you-are-here marker for the economy. It will be published Thursday at 10 a.m.

Other items of interest:

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

Tuesday: The Home Builders' housing market index at 10 a.m. and the Treasury Department international capital report on financial inflows and outflows from and to other countries at 4 p.m.

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

Thursday; The Purchasing Managers Institutute manufacturing index flash report at 9:45 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.
  • 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.
  • 2-year note: Announcement Thursday 11 a.m.
  • 5-year note: Announcement Thursday 11 a.m.
  • 7-year note: Announcement Thursday 11 a.m.
  • None
  • 10-year: Announcement Thursday 1 p.m.
  • Weekly: Thursday
  • 3-year note: Monday
  • 10-year note: Monday
  • 30-year bond: Monday

Fed Gov. Daniel Tarullo, a member of the Federal Open Market Committee, gives a speech on liquidity regulation to the Clearing House's annual conference in New York, on Thursday at 7:45 a.m.

Two other FOMC members makes public appearances: Minneapolis Fed Pres. Narayana Kocherlakota on Tuesday and Cleveland Fed Pres. Loretta Meister on Thursday.

Another Fed official on the calendar: Banking Division senior adviser Thomas Sullivan testifies about international insurance regulation before the House Financial Services Subcommittee on Tuesday at 2 p.m.

Analytical universe

This week I shall be analyzing new bull and bear signals among 1,343 mid-cap and larger stocks and exchange-traded funds.

Trading calendar

By my rules for shorter-term trades, I'm trading December 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 February 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. 16, 2014

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