The week will come in with a whimper — a shortened trading day on Monday and no trading on Tuesday — and go out with a bang — the monthly jobs report and the Federal Reserve’s semiannual monetary policy report to Congress.
The occasion for the slow start is the Independence Day holiday in the United States. On Monday stock markets will close early, at 1 p.m. New York time and on Tuesday they will be shuttered, with normal hours resuming on Wednesday.
Monday will be punctuated by the Institute of Supply Management manufacturing survey at 10 a.m.
The employment situation numbers will be published on Friday at 8:30 a.m. A preview of the numbers will be provided with the private-sector ADP employment report on Thursday at 8:15 a.m.
The Fed’s release of the monetary policy report to Congress on Friday marks a break with the usual practice, which is to time the release to Fed Chair Janet Yellen’s testimony before congressional committees. Instead, the release is coming five days before she testifies.
The Fed said it altered the schedule to allow Congress and the public time to review the report ahead of her testimony. Does the switch signal something out of the ordinary in the report, requiring additional review? The Fed isn’t saying.
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.
Average hourly workweek in manufacturing from the employment report, at 8:30 a.m. Friday.
Manufacturers’ new orders for consumer goods and materials from factory orders, at 10 a.m. Wednesday.
Vendor performance, or the delivery times index, from the Institute of Supply Management manufacturing survey at 10 a.m. Monday.
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 factory orders, at 10 a.m. Wednesday.
Events arranged by day:
Monday: Motor vehicle sales throughout the day, the Purchasing Managers Institute manufacturing index at 9:45 a.m. and the ISM manufacturing survey at 10 a.m. and constructing spending, each at 10 a.m.. Stock markets close early at 1 p.m.
Tuesday: U.S. markets closed for Independence Day.
Wednesday: Federal Open Market Committee minutes for the meeting of June 14 at 2 p.m.
Thursday: Jobless claims at 8:30 a.m., factory orders at 10 a.m., petroleum inventories at 11 a.m. and the M2 money supply at 4:30 p.m.
Friday: The Fed’s monetary policy report to Congress sometime during the day, the employment situation at 8:30 a.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).
Two of the Washington-based Federal Reserve governors will speak on Thursday at separate events.
Fed Vice Chair Stanley Fischer discusses government policy and labor productivity at the Martha’s Vineyard Hebrew Center Summer Institute in Martha’s Vineyard, Massachusetts. at 7:30 p.m.
Fed Gov. Jerome Powell makes the case for housing finance reform to the American Enterprise Institute in Washington at 10 a.m. The address will be streamed live here.
Both are members of the Federal Open Market Committee.
Two other of the Fed glitterati make public appearances during the week: St. Louis Fed Pres. James Bullard on Monday and San Francisco Fed Pres. John Williams on Thursday. Williams is an alternate on the FOMC this year, and Bullard has no position on the money policy body.
By Tim Bovee, Portland, Oregon, July 1, 2017
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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