Already the Fed Speculation Machine is running at a rapid pace: Will the Federal Reserve at long last produce its much-promised increase in the Fed Funds Rate, which in turn will cascade through the economy, dampening activity and reducing the odds of inflation? Or will they once again fail to come through, blaming weak economies in Europe and China? The World wonders.
The week is also punctuated by four major economic reports, including a first look at gross domestic product in the 3rd quarter, out Thursday at 8:30 a.m. The Fed looks at GDP in making money policy decisions, including a deflator used in the report that is the Fed Chair Janet Yellen's favored inflation indicator.
Also out, three more potential market-movers for the week, new home sales on Monday at 10 a.m., durable goods orders on Tuesday at 8:30 a.m. and personal income and outlays on Friday at 8:30 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 S&P 500 index, reported continually during market hours.
Average weekly initial claims for unemployment from the jobless claims report on Thursday at 8:30 a.m.
The index of consumer expectations from the Reuters/University of Michigan consumer sentiment report on Friday at 10 a.m.
Events arranged by day:
Monday: New home sales at 10 a.m. and the Dallas Federal Reserve Bank manufacturing survey at 10:30 a.m.
Tuesday: Durable goods orders at 8:30 a.m., the S&P Case-Shiller home price index for 20 metropolitan areas at 9 a.m. and consumer confidence at 10 a.m.
Wednesday: Petroleum inventories at 10:30 a.m. and the FOMC meeting announcement at 2 p.m.
Thursday: GDP and jobless claims at 8:30 a.m., pending home sales at 10 a.m. and the M2 money supply at 4:30 p.m.
Friday: Personal income and outlays and the employment cost index at 8:30 a.m., the Chicago Purchasing Managers index at 9:45 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 1.24%.
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 floating rate: Auction Wednesday 11:30 a.m.
- 5-year: Auction Wednesday 1 p.m.
- 7-year: Auction Thursday 1 p.m.
- None.
- 30-year: Settlement Friday.
As is there practice during meetings of the Federal Open Market Committee, the Fed glitterati -- an exceptionally well-behaved group -- stay silent while the Gang of 12 makes money policy.
Analytical universe
This week I shall be analyzing new bull and bear signals among 517 large-cap stocks and exchange-traded funds.
Good trading.
-- Tim Bovee, Portland, Oregon, Oct. 25, 2015
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
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Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.License
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