Sunday, January 4, 2015

The Week Ahead: Jobs, minutes, global trade

The Labor Department drills down into the jobs and joblessness numbers as it releases the employment situation report on Friday at 8:30 a.m. New York time. The report is important politically, of course, as office holders and wannabes take credit and are given blame for something they have very little control over.

Of greater importance, the Federal Open Market Committee watches employment closely in making its money policy decisions, Fed Chair Janet Yellen's Labor Market Dashboard epitomizing the dataset.

Long story short: Good jobs numbers give the Fed more leeway to adjust interest rates in order to fend off inflation, making stocks and their derivatives marginally less attractive in the marketplace. Bad jobs numbers make interest rate adjustments less likely.

The ADP employment report, released Wednesday at 8:15 a.m. by the nation's leading payroll company, will provide a sneak preview of the government report.

The FOMC minutes from last year's Dec. 16-17 meeting will be released on Wednesday at 2 p.m. The Fed under Yellen and her predecessor, Ben Bernanke, has been so free of surprises that the minutes have less impact than they used to. Still, worth watching, just in case.

Also on Wednesday, the international trade numbers will be published 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.
The S&P 500 index, reported continually during market hours.

Manufacturers new orders for consumer goods and materials from the factory orders report, at 0 a.m. Tuesday.

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

Other items of interest:

Monday: Motor vehicle sales throughout the day.

Tuesday: Factory orders and the Institute of Supply Management non-manufacturing index, both at 10 a.m.

Wednesday: Petroleum inventories at 10:30 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: Auction Tuesday 11:30 a.m., settlement Thursday
  • Weekly bills: Settlement Thursday
  • 3-year: Announcement Thursday 11 a.m.
  • 10-year: Announcement Thursday 11 a.m.
  • 30-year: Announcement Thursday 11 a.m.

The regional Federal Reserve Bank presidents emerge from their holiday hideaways and take to the speaking circuit this week: Minneapolis Fed Pres. Narayana Kocherlakota, an FOMC member, on Thursday; FOMC alternates San Francisco Fed Pres. John Williams on Monday and Chicago Fed Pres. Charles Evans and Richmond Fed Presl Jeffrey Lacker on Friday; and a president unaffiliated this year with the money-policy committee, Boston Fed Pres. Eric Rosengren on Thursday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 1,201 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. 4, 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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