With the Federal Open Market Committee having declined to raise interest rates last week, traders' collective eye turns to hints of what might influence money policy at the FOMC's Oct. 28-29 meeting, giving outsize importance not only to economic data, such as the GDP and its inflation estimate, but also to speeches by central bankers, such as Fed Chair Janet Yellen's address at 5 p.m. Thursday at the University of Amherst. Her subject: Inflation Dynamics and Monetary Policy.
Two housing market reports will hit the Street this week: Existing home sales on Monday and new home sales on Thursday, each at 10 a.m. The housing market is often the canary in the coal mine in a weakening economy.
Durable goods orders, a measure of confidence in the economy, will be published on Thursday at 8:30 a.m. The idea behind it is that a willingness to buy big-ticket items expresses a judgement that the good times will continue to roll, for awhile at least.
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.
The index of consumer expectations from the Reuters/University of Michigan consumer sentiment report, at 10 a.m. Friday.
Events arranged by day:
Monday: Existing home sales at 10 a.m.
Wednesday: PMI manufacturing index flash report at 9:45 a.m., and petroleum inventories at 10:30 a.m.
Thursday: Durable goods orders at 8:30 a.m., jobless claims at 8:30 a.m., new home sales at 10 a.m., the M2 money supply at 4:30 p.m. and Fed Chair Janet Yellen at 5 p.m.
Friday: GDP at 8:30 a.m. and Reuters/University of Michigan consumer sentiment zt 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 1.24%.
Treasury Debt
Bills
- 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.
- 2-year: Auction Tuesday 1 p.m.
- 2-year fixed rate: Auction Wednesday 11:30 a.m.
- 5-year: Auction Wednesday 1 p.m.
- 7-year: Auction Thursday 1 p.m.
- None.
- None.
In addition to Fed Chair Yellen on Thursday, two others of the Fed glitterati have scheduled public appearances.
Atlanta Fed Pres. Dennis Lockhart, a member of the FOMC, pulls off a scheduling trifecta, speaking Monday at 1 p.m., Tuesday at 7 p.m. and Wednesday at 12:30 p.m. Lockhart last week voted with the majority to keep the Federal Funds rate unchanged.
Kansas City Fed Pres. Esther George, an FOMC alternate, speaks on Friday.
Analytical universe
This week I shall be analyzing new bull and bear signals among 502 large-cap stocks and exchange-traded funds.
Good trading.
-- Tim Bovee, Portland, Oregon, Sept. 20, 2015
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