Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are advancing after Friday’s record highs.
Recent strength is linked to mostly stronger than expected corporate quarterly earnings reports and despite supply-chain problems, tight labor markets and last week’s news that the Federal Reserve approved plans to start scaling back its bond-buying stimulus program.
A strong earnings season has helped push stock index futures to new highs. Approximately 82% of S&P 500 companies that have reported results this season have topped analysts’ earnings expectations, according to FactSet data.
Federal Reserve Chairman Jerome Powell will speak at 9:30 central time.
Despite central banks removing some accommodation, the dominant fundamentals remain supportive for stock index futures.
CURRENCY FUTURES
The U.S. dollar index is lower, and the euro currency is a little higher.
The Japanese yen is higher despite news that Japan cut its outlook on economic conditions for the first time in over two years after the coincident indicator index extended its decline in September, falling to the lowest level in a year. The index showing current economic conditions, compiled from data including factory output, employment and retail sales, fell a preliminary 3.8 points from the previous month to 87.5.
INTEREST RATE MARKET FUTURES
The 30-year Treasury bond futures are lower today after advancing sharply above a seven-day congestion pattern on Friday. The breakout to the upside took place in spite of mostly bearish news, which is a sign of longer term strength for futures.
On Friday, Kansas City Federal Reserve leader Esther George warned that the outlook for inflation laid out by Fed Chair Powell last Wednesday may not accurately describe the inflation outlook, with potential implications for monetary policy.
The Treasury will auction three-year notes.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
