Sunday, May 29, 2016

The Week Ahead: Holiday, manufacturing, jobs

A short week punctuated at the end by a major exclamation mark.

U.S. markets are closed on Monday for the Memorial Day holiday. It is also a bank holiday in London. Markets in Tokyo and Sydney will be open.

The exclamation mark is the employment situation report, published Friday at 8:30 a.m. New York time. With the pre-eminent question impacting the markets these days being whether the Federal Open Market Committee will raise rates at the June 14-15 meeting or not, Friday's announcement takes on outsized importance.

The private-sector ADP employment report provides a sneak preview of the government report. It will be out on Wednesday at 8:15 a.m.

Other top-tier reports out during the week are personal income and outlays on Tuesday at 8:30 a.m., the Institute of Supply Management manufacturing index on Wednesday at 10 a.m. and international trade 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 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. Wednesday.

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.

Manufacturers' new orders for non-defense capital goods from the factory orders report at 10 a.m. Friday.

Connectography: Mapping the Future of Global Civilization
by Parag Khanna

Events arranged by day:

Monday: Markets closed for Memorial Day.

Tuesday: Personal income and outlays at 8:30 a.m., the S&P Case-Shiller home price index in 20 metropolitan areas at 9 a.m., the Chicago purchasing managers index at 9:45 a.m., consumer confidence at 10 a.m. and the Dallas Federal Reserve Bank manufacturing survey at 10:30 a.m.

Wednesday: Motor vehicle sales throughout the day, the ADP employment report at 8:15 a.m., the PMI manufacturing index at 9:45 a.m., the ISM manufacturing index and construction spending, each at10 a.m., and the Federal Reserve "Beige Book" at 2 p.m.

Thursday:  Jobless claims at 8:30 a.m., petroleum inventories at 11 a.m. and the M2 money supply at 4:30 p.m.

Friday: Employment situation and international trade, each at 8:30 a.m., and factory orders and the ISM non-manufacturing index, each 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 1.51%, unchanged from a week earlier.

Treasury Debt

  • 4-week: Announcement Tuesday 11 a.m., auction Tuesday 11:30 a.m., settlement Thursday.
  • 3-month: Auction Tuesday 11:30 a.m., announcement Thursday 11 a.m., settlement Thursday.
  • 6-month: Auction Tuesday 11:30 a.m., announcement Thursday 11 a.m., settlement Thursday.
  • 2-year settlement Tuesday.
  • 3-year announcement Thursday 11 a.m.
  • 5-year settlement Tuesday.
  • 7-year settlement Tuesday.
  • 10-year announcement Thursday 11 a.m.
  • 3--year announcement Thursday 11 a.m.
  • 10-year settlement Tuesday.

The Federal Reserve "Beige Book", a description of the state of the economy in each of the 12 Fed districts, will be published Wednesday at 2 p.m.

Fed. Gov. Lael Brainard discusses the economic outlook and monetary policy at the Council on Foreign Relations in Washington on Friday at 12:30 p.m.

Fed. Gov. Jerome Powell takes part in a Q&A at the Prudential Regulation Conference of the Securities Industry and Financial Markets Association in Washington on Thursday at 8:35 a.m.

Two Federal Open Market Committee alternates have public appearances: Dallas Fed Pres.  Robert Kaplan on Thursday and Chicago Fed Pres. Charles Evans on Friday.

Analytical universe

This week I shall be analyzing new trading signals from among 482 large-cap stocks and exchange-traded funds.

Good trading!

-- Tim Bovee, Portland, Oregon, May 29, 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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