Sunday, October 30, 2016

The Week Ahead: Jobs and the Fed

Fresh stats about the employment situation will be poublished Friday at 8:30 a.m. New York time, with a private payroll company giving a sneak preview with the ADP employment report on Wednesday at 8:15 a.m.

It is a very busy and significant week in economic reporting, beginning with personal income and outlays on Monday at 8:30 a.m., the Institute of Supply Management manufacturing index on Tuesday at 10 a.m. and international trade on Friday at 8:30 a.m.

But the biggest market mover of the week may well be the Federal Open Market Committee announcement on Wednesday at 2 p.m., culminating a two-day session.

The conventional wisdom has been that the Fed will wait until after the elections to raise interest rates. But funnier things have happened, such as the head of the FBI issuing potentially election-altering insinuations about a presidential candidate less than two weeks  before people vote on Nov. 8. Me, I'm placing no bets on interest rates either way.

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. Thursday.

Vendor performance, also called the deliveries times index, from the ISM manufacturing survey, at 10 a.m. Tuesday

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. Thursday.

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Events arranged by day:

Monday: Personal income and outlays at 8:30 a.m., the Chicago Purchasing Managers index at 9:45 a.m. and the Dallas Feeral Reserve Bank manufacturing survey at 10:30 a.m.

Tuesday: Motor vehicle sales throughout the day, the Purchasing Managers Institute manufacturing index at 9:45 a.m., the ISM manufacturing index at 10 a.m. and construction spending at 10 a.m.

Wednesday:  ADP employment report at 8:15 a.m., petroleum inventories at 10:30 a.m. and the FOMC meeting announcement at 2 p.m.

Thursday: Jobless claims and productivity and costs, each at 8:30 a.m., factory orders and the ISM non-manufacturing index, each at 10 a.m., and the M2 money supply at 4:30 p.m.

Friday: Employment situation and international trade, each at 8:30 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 1.65%, up four 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.
  • 52-week: Announcement Thursday 11 a.m.
  • 3-year: Announcement Wednesday 8:30 a.m.
  • 10-year: Announcement Wednesday 8:30 a.m.
  • 30-year: Announcement Wednesday 8:30 a.m.
  • None.

Fed Vice Chairman Stanley Fischer, a member of the Federal Open Market Committee, delivers an a address on Policy Changes after the Great Recession to the Jaques Polack Annual Research Conference in Washington, D.C., on Friday at 4 p.m. It can be viewed live on this page.

Dallas Fed Pres. Robert Kaplan, an FOMC alternate, also makes a public appearance on Friday.


There were booms and busts long before the emergence of modern central banking. Left to its own devices, the free market can easily end up in a dead end like that of the 1930s.

--John Gray, "The Friedrich Hayek I knew, and what he got right - and wrong" (2015)

-- Tim Bovee, Portland, Oregon, Oct. 30, 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.
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