Sunday, March 13, 2016

The Week Ahead: FOMC, Prices, Retail, Housing, Witches

The Federal Open Market Committee holds a major meeting on Wednesday, complete with fresh forecasts and a news conference. Look for the money policy statement and forecasts at 2 p.m. New York time. Chair Janet Yellen meets with reporters at 2:30 p.m.

Appropriately, the meeting coms amid a week of fresh data on prices: The producer price index on Tuesday and the consumer price index on Wednesday, each at 8:30 a.m.

Two sector reports are on the calendar: retail sales on Tuesday and housing starts on Wednesday, each at 8:30 a.m.

The week ends with a quadruple witching day with stock index futures and optons, stock options and single stock futures all expiring on the same day. The confluence, usually, produces higher volume.

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 at 8:30 a.m. Thursday.

Building permits for new private homes from housing starts at 8:30 a.m. Wednesday.

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

The index of leading indicators, although not itself a leading indicator, boils down the various indicators into a single number that serves as a convenient "You Are Here" marker for the business cycle.

Events arranged by day:

Tuesday: Producer price index, retail sales and the Empire State manufacturing survey of conditions in New York, each at 8:30 a.m., business inventories and the Home Builders housing market index, each at 10 a.m., and the Treasury international capital report tracking inflows and outflows of capital between the United States and the rest of the world.

Wednesday:  Consumer price index and housing starts, each at 9:30 a.m., industrial production at 9:15 a.m., petroleum inventories at 10:30 a.m., the FOMC meeting announcement and release of FOMC forecasts, each at 2 p.m., and Fed Chair Janet Yellen's news conference at 2:30 p.m.

Thursday:  Jobless claims and the Philadelphia Federal Reserve Bank business outlook survey, each at 8:30 a.m., the job openings and labor turnover survey at 10 a.m. and the M2 money supply at 4:30 p.m.

Friday: Consumer sentiment at 10 a.m. and a quadruple witching day at the markets.

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 1.51%, up 0.05% from a week earlier.

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., settlement Thursday.
  • 6-month: Auction Monday 11:30 a.m., announcement Thursday 11 a.m., settlement Thursday.
  • None.
  • None.
  • 10-year: Auction Thursday 1 p.m.

In addition to Fed Chair Janet Yellen's news conference on Tuesday at 2:30 p.m., the week will see public appearances by three other FOMC members, all on Friday: New York Fed Pres. William Dudley, St. Louis Fed Pres. James Bullard and Boston Fed Pres. Eric Rosengren.

Analytical universe

This week I shall be analyzing new trading signals from among 485 large-cap stocks and exchange-traded funds.

Good trading!

-- Tim Bovee, Portland, Oregon, March 13, 2016


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.

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