The Week Ahead: Jobs, GDP, income, outlays, global trade, Volcker Rule

U.S. markets will be closed on Monday for the Memorial Day holiday, which traditionally marks the start of the summer vacation season. Monday is a banking holiday in the U.K., but other major forex markets, Tokyo and Sydney, will be open for business as usual.

After the long weekend comes a short week with an economic reporting landscape dotted with peak events.

The employment situation report will be released Friday at 8:30 a.m. New York time. As always, the ADP employment report, on Wednesday at 8:15 a.m., will provide a sneak preview.

Also on Wednesday, we’ll get a revision providing a second look at the 1st quarter gross domestic product, out at 8:30 a.m.

A third peak in the landscape is personal income and outlays, a look at the extent to which we’re able to live within our means, to be published on Thursday at 8:30 a.m.

And fourthly, international trade in goods on Wednesday at 8:30 a.m.

In Fedworld, the Federal Reserve Board meets Wednesday at 3 p.m. to consider easing Volcker Rule restrictions on banks’ proprietary trading. A recent Reuters article by Pete Schroeder explains the meeting.

The Federal Reserve Beige Book, a narrative description of conditions in each of the Fed’s 12 regions will be published Wednesday at 2 p.m.

Fed Gov. Lael Brainard will speak about the outlook for economic and monetary policy at the Forecasters Club of New York, on Thursday at 1 p.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.

Vendor performance, or the deliveries times index, from the Institute of Supply Management manufacturing survey, at 10 a.m. Friday.

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.

Events arranged by day:

Monday: U.S. markets are closed.

Tuesday: The Case-Shiller home price index in 20 metro areas at 9 a.m. and consumer confidence at 10 a.m.

Wednesday: ADP employment report at 8:15 a.m., GDP and international trade in goods, each at 8:30 a.m., the Federal Reserve Beige Book at 2 p.m. and the Fed Board Volcker Rule meeting at 3 p.m.

Thursday: Jobless claims and Personal income and outlays, each at 8:30 a.m., the Chicago Purchasing Managers index at 9:45 a.m., pending home sales at 10 a.m., petroleum inventories at 11 a.m. and the M2 money supply at 4:30 p.m.

Friday: Motor vehicle sales throughout the day, employment situation at 8:30 a.m., the  Purchasing Managers Institute manufacturing index at 9:45 a.m., and the Institute of Supply Management manufacturing survey and construction spending, each at 10 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).

By Tim Bovee, Portland, Oregon, May 26, 2018


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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