Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures declined after some companies reported weaker than expected quarterly earnings reports that showed that supply-chain problems and tight labor markets are having an adverse impact.
Overall, strong earnings have supported a stock index futures this month. Approximately 82% of the S&P 500 companies that have reported results this earnings season have beaten analysts’ earnings expectations, according to FactSet data.
Personal income in September declined 1.0% when down 0.1% was expected.
The 8:45 central time October Chicago PMI is expected to come in at 64.2.
The 9:00 October University of Michigan’s consumer sentiment index is anticipated to be 71.4.
The longer-term fundamental and technical aspects remain supportive for stock index futures.
CURRENCY FUTURES
The U.S. dollar index is higher.
As we get closer to the November 3 Federal Open Market Committee meeting, traders are likely to refocus their attention to prospects of the Federal Reserve tapering its $120 billion a month in asset purchases.
Higher prices are likely for the greenback in advance of the next FOMC policy meeting.
The euro currency is lower despite news that the euro area economy expanded by 2.2% on the quarter in the three months to September, following downwardly revised 2.1% growth in the previous period and slightly beating market expectations of 2.0%.
Germany’s economy grew 1.8% on the quarter in July-September 2021, following an upwardly revised 1.9% expansion in the previous three-month period and missing market expectations of 2.2%.
Next week the Reserve Bank of Australia meets on Tuesday, the U.S. Federal Reserve on Wednesday, and the Bank of England on Thursday.
INTEREST RATE MARKET FUTURES
There are no Federal Reserve speakers today due to the communications blackout period ahead of the November 2-3 FOMC policy meeting.
In advance of the upcoming FOMC meeting, the dominant fundamentals for the 30-year Treasury bond futures are offsetting. There is the bullish influence of a slowing rate of growth in the global economy, which is being offset by the bearish influence of the anticipated tapering of the Fed’s $120 billion a month in asset purchases.
The next leg up for the 30-year Treasury bond futures will likely be after the next FOMC meeting on November 3 is out of the way.
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