Sunday, November 6, 2016

The Week Ahead: The economy holds its breath

It's as though the economy is holding its breath. In the most momentous week in American politics of recent decades, not a single major economic report is due to hit the markets, leaving the stage bare for the general election on Tuesday.

Clinton or Trump? In many ways it's the biggest economic report of the year; indeed, if we listen to the partisans, the most consequential of the past 228 years.

Friday is the Veterans Day holiday in the United States. Banks are closed, markets are open.

All times times are for the New York time zone.

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.

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.

The index of consumer expectations from the University of Michigan consumer sentiment survey at 10 a.m. Friday.

Invisible Influence: The Hidden Forces that Shape Behavior
by Jonah Berger

Events arranged by day:

Tuesday: Job openings and labor turnover at 10 a.m.

Wednesday: Petroleum inventories at 10:30 a.m.

Thursday: Jobless claims at 8:30 a.m., the Treasury budget at 2 p.m. and the M2 money supply at 4:30 p.m.

Friday: Consumer sentiment 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 1.58%, down seven 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: Auction Tuesday 11:30 a.m. settlement Thursday.
  • 3-year: Auction Tuesday 1 p.m.
  • 10-year: Auction Wednesday 1 p.m.
  • 30-year: Auction Thursday 1 p.m.
  • 10-year: Announcement Thursday 1 p.m.

The economy might be mainly silent for the week, but not so some the Federal Reserve glitterati, who have fallen into a paroxysm of loquaciousness extending even to election day itself.

Fed Vice Chairman Stanley Fischer addresses the 20th annual conference of the Central Bank of Chile via live video on Friday at 9 a.m. New York time. His topic: U.S. Monetary Policy and the Global Economy.

One other member of the Federal Open Market Committee makes a appearance: St, Louis Fed Pes. James Bullard on Thursday.

Two FOMC alternates take to the podium. Chicago Fed Pres. Charles Evans, once on Monday and twice on election day, Tuesday, and Minneapolis Fed Pres. Neel Kashkari on Wednesday.

San Francisco Fed Pres. John Williams, who holds no FOMC position this year, speaks on Wednesday.


When the shadow of the Presidential and Congressional election is lifted we shall, I hope, be in a better temper to legislate.

--U.S. Rep. James A. Garfield (later president), letter to Genral Hazen (1867)

-- Tim Bovee, Portland, Oregon, Nov. 6, 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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