Sunday, June 21, 2015

The Week Ahead: GDP, housing, durables, personal money

The third estimate of the 1st Quarter gross domestic product provides the best chance for the economy to give the markets a nudge during the week. The second estimate in May came in at a 0.7% decline, and any surprising change from that level will prompt a response from traders. It will be out on Wednesday at 8:30 .m.

Two housing market reports, major purchases and personal money flows will also be potential market movers among the week's economic reports.

Existing home sales will be published on Monday and new home sales on Tuesday, each at 10 a.m. New York time.

Durable goods orders will be released on Tuesday and personal income and outlays, source of the important savings rate, on Thursday, each at 8:30 a.m.

Although those reports can conceivably move markets, it would take a surprise way out of the norm for them to do so. If the economic reporting were the sole market influence, it would be a singularly unexciting week for traders.

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. 

Index of consumer expectations from the Reuters/University of Michigan consumer sentiment report, at 10 a.m. Friday.

Items of interest, arranged by day:

Monday: Existing home sales at 10 a.m.

Tuesday: Durable goods orders at 8:30 a.m., the PMI manufacturing index flash report at 9:45 a.m. and new home sales at 10 a.m.

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

Thursday: Jobless claims and personal income and outlays each at 8:30 a.m.

Friday: Consumer sentiment at 10 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 1.67%.

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.
  • 2-year: Auction Tuesday 1 p.m.
  • 2-year floating rate: Auction Wednesday 11:30 a.m.
  • 5-year: Auction Wednesday 1 p.m.
  • 7-year Thursday Auction 1 p.m.
  • None.
  • None.

Fed Gov. Jerome Powell  speaks on ways to improve the safety of the payment system at a conference hosted by the Kansas City Fed, on Thursday at 9:45 a.m. New York time. Kansas City Fed Pres. Esther George speaks on Friday.

Powell is a member of the Federal Open Market Committee, and George is an alternate this year.

Analytical universe

This week I shall be analyzing new bull and bear signals among 483 large-cap stocks and exchange-traded funds.

Good trading.

-- Tim Bovee, Portland, Oregon, June 21, 2015


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