Saturday, September 17, 2016

The Week Ahead: Fed, Fed and more Fed

The Federal Open Market Committee meeting this week last two days, ending Wednesday with the full three ring circus of money policy: an announcement at 2 p.m. New York time, along with forecasts by Fed governors and bank presidents, and followed by a news conference by Fed Chair Janet Yellen at 2:30 p.m.

Although the Fed and its interest rate intentions will dominate the week, one major economic report will provide a potential trading blip: Housing starts on Tuesday 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 at 8:30 a.m. Thursday.

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




Rescue Your Money: How to Invest Your Money During these Tumultuous Times
by Ric Edelman



Events arranged by day:

Monday: The Home Builders housing market index at 10 a.m.

Tuesday: Housing starts at 8:30 a.m.

Wednesday: Petroleum inventories at 10:30 a.m., the FOMC announcement and forecasts at 2 p.m. and Fed Pres. Janet Yellen's news conference at 2:30 p.m.

Thursday:  Jobless claims at 8:30 a.m., existing home sales at 10 a.m. and the M2 money supply at 4:30 p.m.

Friday: The Purchasing Managers Institute manufacturing index flash release at 9:45 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 1.38%, up four basis points from a week earlier.

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., settlement Thursday.
  • 6-month: Auction Monday 11:30 a.m., announcement Thursday 11 a.m., settlement Thursday.
Notes
  • 2-year: Announcement Thursday 11 a.m.
  • 2-year floating rate: Announcement Thursday 11 a.m.
  • 5-year: Announcement Thursday 11 a.m.
  • 7-year: Announcement Thursday 11 a.m.
Bonds
  • None.
TIPS
  • 10-year: Auction Thursday 1 p.m.
Fedsters

In addition to the FOMC announcement and news conference with Janet Yellen, both on Wednesday at 2 p.m. and 2:30 p.m., respectively, there is one event involving the Fed glitterati: A conference, Reinventing Our Communities, sponsored by the Philadelphia Federal Reserve Bank.

Three Fed bank presidents, Philadelphia Fed Pres. Patrick Harker, Atlanta Fed Pres. Dennis Lockhart and Cleveland Fed Pres. Loretta Mester will conduct a panel discussion on the role of the Fed in community.

Mester is a member of the Federal Open Market Committee this year, Harker is an FOMC alternate and Lockhart has no role on the FOMC this year.

Thought
A lot of money goes to money-heaven.

--Björgólfur Thor Björgólfsson, Iceland entrepreneur, explaining the evaporation of paper wealth in the 2008–2009 Icelandic financial crisis.

-- Tim Bovee, Portland, Oregon, Sept. 17, 2016

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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Disclaimer
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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