Sunday, May 3, 2015

The Week Ahead: Jobs, trade and Yellen

A fresh employment report will be released Friday at 8:30 a.m. New York time, preceded by a sneak preview on Wednesday, the private-sector ADP employment report at 8:15 a.m.

It will be yet another data point to add confusion to an already confusing field of economic data: The gross domestic product dropping bearishly to a 0.2% annualized growth rate, less than a tenth of the prior quarter's rate, and jobless claims at a 15-year low, a bullish sign that the job market is picking up.

Happy days or national malaise? The ambiguity of the data may well add to the jobs report's impact.

Another potential market-mover out during the week: International trade on Tuesday at 8:30 a.m.

Fed Chair Janet Yellen delivers a speech, "Finance and Society", at the Institute for New Economic Thinking conference in Washington, on Wednesday at 9:15 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. Monday.

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

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

Manufacturers' new order for non-defense capital goods from the factor orders report, at 10 a.m. Monday.

Other items of interest:

Monday: Factory orders at 10 a.m.

Tuesday: The Institute of Supply Management non-manufacturing index at 10 a.m.

Wednesday:  Productivity and costs at 8:30 a.m. and petroleum inventories at 10:30 a.m.

I also keep an eye on the Baltic Dry Index, updated daily, and the 5-year implied inflation rate based on U.S. Treasury yields, which presently stands at 1.25%.

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: Announcement Wednesday 8:30 a.m.
  • 10-year: Announcement Wednesday 8:30 a.m.
  • 30-year: Announcement Wednesday 8:30 a.m.
  • None

Fed Gov. Daniel Tarullo makes opening remarks at the Economic Growth and Regulatory Paperwork Reduction Act Outreach Meeting in Boston at Monday at 9 a.m.

Other members of the Federal Open Market Committee taking to the podium this week are Chicago Fed Pres. Charles Evans on Monday and Atlanta Fed Pres. Dennis Lockhart on Tuesday.

One FOMC alternate has scheduled an appearance, Kansas City Fed Pres. Esther George on Tuesday.

And one other of the Fed glitteratiMinneapolis Fed Pres. Narayana Kocherlakota, speaks on Monday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 492 large-cap stocks and exchange-traded funds.

Trading calendar

By my rules for shorter-term trades of Monthly options, I'm trading June 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 August options and later for single calls and puts as well as straddles. Shares and Weekly options, of course, are good at any time.

Good trading.

-- Tim Bovee, Portland, Oregon, May 3, 2015


My trading rules can be read here.


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