Sunday, July 12, 2015

The Week Ahead: Inflation, retail, industry, housing, Yellen's testimoney

Two measures of inflation dominate the week in economic reporting, with retailing, industry and housing adding three dashes of seasoning to the sauce, and the Fed chair's testimony before Congress providing a more subtle and lingering flavor.

The consumer price index, a major measure of the economy's health, will be published Friday, two days after the producer price index, out on Wednesday. Both will hit the newsfeeds at 8:30 a.m. New York time.

Comprehensive retail sales statistics will be released on Tuesday at 8:30 a.m., industrial production on Wednesday at 9:15 a.m. and housing starts on Friday at 8:30 a.m.

Also, look for the Philadelphia Federal Reserve business outlook survey on Thursday at 10 a.m.

Federal Reserve Chair Janet Yellen delivers her semiannual report to each house of Congress this week. She testifies before the House Committee on Financial Services on Wednesday at 10 a.m. and before the Senate Committee on Banking, Housing and Urban Affairs on Thursday at 2:30 p.m.

In between the two rounds of testimony, the Federal Reserve will publish the Beige Book, on Thursday 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. Friday.

The 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: The Treasury budget at 2 p.m.

Tuesday: Retail sales and import and export prices at 8:30 a.m., and business inventories at 10 a.m.

Wednesday: Producer prices and the Empire State manufacturing survey, both at 8:30 a.m.,  industrial production at 9:15 a.m., petroleum inventories at 10:30 a.m. and the Federal Reserve Beige Book, a narrative of economic conditions in each of the Fed's regions, at 2 p.m.

Thursday: Jobless claims at 8:30 a.m., the Philadelphia Federal Reserve business outlook survey, the Home Builders housing market index at 10 a.m. and the Treasury international capital report at 4 p.m.

Friday: Consumer price index and housing starts at 8:30 a.m., and 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 1.66%.

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: Announcement Thursday 11 a.m.
  • 3-year: Settlement Wednesday.
  • 10-year: Settlement Wednesday.
  • 30-year: Settlement Wednesday.
  • 10-year: Announcement Thursday 11 a.m..

In addition to Chair Janet Yellen, two other of the Fed glitterati are scheduled to speak during the week: San Francisco Fed Pres. John Williams, a member of the Federal Open Market Committee, on Wednesday, and Kansas City Fed Pres. Esther George, an FOMC alternate, on Tuesday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 500 large-cap stocks and exchange-traded funds.

Good trading.

-- Tim Bovee, Portland, Oregon, July 12, 2015


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