Sunday, August 28, 2016

The Week Ahead: Jobs, Income, Outlays, Trade

A major input into the brains of small coterie that manages U.S. monetary policy will hit the markets on Friday: The employment situation figures will be released at 8:30 a.m. New York time.

A preview of the numbers from a major payroll company, the ADP employment report, will be published on Wednesday at 8:15 a.m.

Two other impactful reports are scheduled: Personal income and outlays on Monday and international trade on Friday, each 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 Institutes of Supply Management manufacturing survey at 10 a.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.

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

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Events arranged by day:

Monday: Personal income and outlays at 8:30 a.m. and the Dallas Federal Reserve manufacturing survey of conditions in Texas at 10:30 a.m.

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

Wednesday:  The ADP employment report at 8:15 a.m., the Chicago Purchasing Managers index at 10 a.m. and petroleum inventories at 10:30 a.m.

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

Friday: The employment situation and international trade, each 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 1.35%, down two basis points 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.
  • 2-year: Settlement Wednesday.
  • 5-year: Settlement Wednesday.
  • 7-year: Settlement Wednesday.
  • None.
  • 5-year: Settlement Wednesday.

With the monetary policy version of Woodstock having now come to an end, the Fed glitterati returns to the speaking circuit.

Three Federal Open Market Committee members take to the podium during the week: Boston Fed Pres. Eric Rosengren and Chicago Fed Pres. Charles Evans on Wednesday and Cleveland Fed Pres. Loretta Mester on Thursday.

An FOMC alternate, Minneapolis Fed Pres. Neel Kashkari, speaks on Wednesday.

Richmond Fed Pres. Jeffrey Lacker, who holds no position on the FOMC this year, makes a public appearance on Friday.


Among the maxims on Lord Naoshige's wall there was this one: "Matters of great concern should be treated lightly." Master lttei commented, "Matters of small concern should be treated seriously." Among one's affairs there should not be more than two or three matters of what one could call great concern. If these are deliberated upon during ordinary times, they can be understood. Thinking about things previously and then handling them lightly when the time comes is what this is all about.

--Yamamoto Tsunetomo, Japanese samurai, "Hagakure" (1716)

-- Tim Bovee, Portland, Oregon, Aug. 28, 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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