Saturday, September 26, 2015

The Week Ahead: Jobs, income, spending, manufacturing, Fedsters' return

The employment situation report, out Friday at 8:30 a.m. New York time, will provide yet another nail holding together arguments for or against the Federal Open Market Committee's avowed plan to raise the interest rate Real Soon Now.

The ADP employment report, released Wednesday at 8:15 a.m., by a private-sector payroll company, will provide a sneak preview of the main event.

Two other major reports will potentially pummel the markets during the week: Personal income and outlays on Monday at 8:30 a.m. and the Institute of Supply Management manufacturing survey on Thursday at 10 a.m.

Federal Reserve Chair Janet Yellen gives welcoming remarks at the Community Banking Research and Policy Conference in St. Louis, Missouri, on Wednesday at 3 p.m.  It's not a policy address and there's no reason to think that there will be anything new on money policy, but just in case, I shall keep one eye on the event.

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. Friday.

Vendor performance, also called the deliveries times index, from the ISM manufacturing survey at 10 a.m. Thursday.

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

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

Events arranged by day:

Monday: Personal income and outlays at 8:30 a.m., pending home sales at 10 a.m. and the Dallas Federal Reserve Bank manufacturing survey at 10:30 a.m.

Tuesday: The S&P Case-Shiller home price index covering 20 metro areas at 9 a.m. and consumer confidence at 10 a.m.

Wednesday: The ADP employment report st 8:15 a.m., the Chicago Purchasing Managers index at 9:45 a.m., petroleum inventories at 10:30 a.m. and Fed Chair Yellen remarks at 3 p.m.

Thursday: Motor vehicle sales throughout the day, jobless claims at 8:30 a.m., the Purchasing Managers Institute manufacturing index at 9:45 a.m., the ISM manufacturing survey and construction spending, each at 10 a.m., and the M2 money supply at 4:30 p.m.

Friday: Employment at 8:30 a.m. and factory orders 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 1.16%.

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 Thursday 11 a.m.
  • 10-year: Announcement Thursday 11 a.m.
  • 30-year: Announcement Thursday 11 a.m.
  • None.

As ducks migrate south for the winter, so the Federal Reserve offcials, with the advent of autumn, return to the speaker's podium after a summer's absence.

In addition to Chair Janet Yellen on Wednesday,  three members of the Fed's Washington, D.C. leadership have public addresses or testimony.

Fed Gov. Daniel Tarullo speaks on Capital Regulation Across Financial Intermediaries at a Banque de France Conference in Paris on Monday at 5:15 a.m. New York time.

Associate Director Tom Sullivan of the Banking Supervision and Regulation Division testifies on insurance regulation before the Housing an d Insurance Subcommittee of the House Financial Services Committee, on Tuesday at 2 p.m.

Fed Gov. Lael Brainard speaks on Community Banks, Small Business Credit and Online Lending at the conference sponsored by the Fed and the Conference of State Bank Supervisors, on Wednesday at 8:15 p.m. in St. Louis Missouri.

Yellen, Tarullo and Brainard are members of the Federal Open Market Committee. Other FOMC members scheduled to speak are Chicago Fed Pres. Charles Evans on Monday and San Francisco Fed Pres. John Williams on Monday and Thursday and Fed Vice Chairman Stanley Fischer on Friday.

FOMC alternates: Boston Fed Pres. Eric Rosengren, Cleveland Fed Pres. Loretta Mester and St. Louis Fed Pres. James Bullard on Friday.

One other of Fed glitterati takes to the podium Minneapolis Fed Pres. Narayana Kocherlakota on Friday. He has no seat on the FOMC this year.

Analytical universe

This week I shall be analyzing new bull and bear signals among 486 large-cap stocks and exchange-traded funds.

Good trading.

-- Tim Bovee, Portland, Oregon, Sept. 26, 2015


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