Sunday, January 11, 2015

The Week Ahead: Inflation, retail, industry, Beige

Inflation -- or the lack of it -- highlights the week's economics reporting. The headline-generating consumer price index will be released Friday, a day after its companion indictor, the producer price index, both at 8:30 a.m. New York time.

Other potential market-movers to be published during the week are retail sales on Wednesday at 8:30 a.m., the Philadelphia Federal Reserve survey of conditions in the mid-Atlantic region on Thursday at 10 a.m. and industrial production on Friday at 9:15 a.m.

The Federal Reserve Beige Book, a compedium of conditions in each of the Fed banking regions, is due out at 2 p.m. on Wednesday. Always good reading, although often a bit weak on plot and character development.

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. 

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

Other items of interest:

Tuesday: Job opening and labor turnover survey at 10 a.m. and the Treasury budget at 2 p.m.

Wednesday: Import and export prices at 8:30 a.m., business inventories at 10 a.m. and petroleum inventories at 10:30 a.m.

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

Friday: Treasury international capital inflows and outflows at 4 p.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.
  • 3-year: Auction Monday 1 p.m., settlement Thursday.
  • 10-year: Auction Tuesday 1 p.m., settlement Thursday.
  • 30-year: Auction Wednesday 1 p.m., settlement Thursday.
  • 10-year: Announcement Thursday 11 a.m.

Two Federal Open Market Committee members take to the podium: Philadelphia Fed Pres. Charles Plosser and Minneapolis Fed Pres. Narayana Kocherlakota on Tuesday and Kocherlakota again on Friday.

One FOMC alternate speaks: Atlanta Fed Pres. Dennis Lockhart on Monday

Analytical universe

This week I shall be analyzing new bull and bear signals among 1,197 mid-cap and larger stocks and exchange-traded funds.

Trading calendar

By my rules for shorter-term trades, I'm trading February 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 April 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, Jan. 11, 2015

My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My volatility trading rules can be read here.


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