Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures advanced to record highs due to mostly stronger than expected corporate quarterly earnings reports and despite supply-chain problems, tight labor markets and news that the Federal Reserve approved plans to start scaling back its bond-buying stimulus program.
Today there was support for futures due to the on balance stronger than expected October employment data.
October nonfarm payrolls increased 531,000 when a gain of 450,000 were expected.
The unemployment rate was 4.6% when 4.7% was anticipated.
Hourly earnings increased 0.4%, as estimated.
On the weaker side of the report was the labor participation rate, which was 61.6% when 61.8% was predicted and the average work week, which was 34.7 hours when 34.8 hours were expected.
The 9:00 September consumer credit report is anticipated to show an increase of $15.5 billion.
Despite central banks removing some accommodation, the dominant fundamentals remain supportive for stock index futures.
CURRENCY FUTURES
The U.S. dollar index is higher due to the headline increase in U.S. nonfarm payrolls.
Euro zone retail sales fell by 0.3% from a month earlier in September, following an upwardly revised 1.0% growth rate in August and missing market expectations of a 0.3% advance.
The Halifax house price index in the U.K. rose 8.1% from a year earlier in October, which is the most since June.
The net increase in jobs in Canada in October was 31,200 from September when an increase of 41,600 was expected.
INTEREST RATE MARKET FUTURES
The 30-year Treasury bond futures are higher despite the bearish larger than expected U.S. October nonfarm payrolls number.
Traders are apparently focusing on the bullish weaker than anticipated labor participation rate and the smaller than expected average work week.
Esther George of the Federal Reserve will speak at 8:30.
Expect higher prices for the 30-year Treasury bond futures now that the bearish Fed tapering news is out of the way.
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.
