The Week Ahead: Prices, retail, industry, housing

Two price reports will be published during the week, the consumer price index on Wednesday and the producer price index on Tuesday, each at 8:30 a.m. New York time.

The reports are important in helping to form traders’ expectations for future interest rates.

Also out, on Wednesday,  retail sales at 8:30 a.m., industrial production at 9:15 a.m. Housing starts will be published on Thursday at 8:30 a.m.

Fed Chair Janet Yellen makes her semi-annual reports to Congress. She testifies before the Senate Committee on Banking, Housing and Urban Affairs on Tuesday and before the House Committee on Financial Services. Both appearances begin at 10 .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. Thursday.

The index of leading indicators will be published on Friday at 10 a.m. While not in itself a leading indicator, I find it to be a useful “You Are Here” marker for the business cycle.

Events arranged by day:

Tuesday: Producer price index at 8:30 a.m.

Wednesday: Consumer price index, retail sales and the Empire State manufacturing survey of conditions in New York, each at 8:30 a.m., industrial production at 9:15 a.m., business inventories  and the Home Builders housing market index, each at 10 a.m.,  petroleum inventories at 10:30 a.m. and the Treasury Dept. international capital report at 4 p.m.

Thursday: Jobless claimshousing starts and the Philadelphia Federal Reserve business outlook survey, each at 8:30 a.m., and the M2 money supply at 4:30 p.m.

I also keep an eye on the Baltic Dry Index, updated daily, and the 5-year implied inflation rate which is the difference between the yields on 5-year U.S. Treasury notes and  5-year Treasury inflation protected securities (TIPS).

Fedsters

Aside from Fed Chair Yellen’s congressional appearances,

Two other Federal Open Market Committee members will make public appearances: Dallas Fed Pres. Robert Kaplan on Tuesday and Philadelphia Fed Pres. Patrick Harker on Wednesday.

Two FOMC alternates will speak: Richmond Fed Pres. Jeffrey Lacker on Tuesday and Cleveland Fed Pres. Loretta Mester on Friday.

And two of the Fed glitterati who aren’t sitting on the FOMC this year will take to the podium: Atlanta Fed Pres. Dennis Lockhart, who steps down Feb. 28, on Tuesday and Boston Fed Pres. Eric Rosengren on Wednesday.

By Tim Bovee, Portland, Oregon, Feb. 12, 2017

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