Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are higher today despite yesterday’s Federal Reserve Chair Powell’s hawkish testimony to the Senate Banking Committee.
The ADP employment report showed an increase of 534,000 when 525,000 were expected.
The 8:45 central time November PMI manufacturing final is anticipated to be 59.1.
The 9:00 November Institute for Supply Management manufacturing index is predicted to be 61.1, and the 9:00 October construction spending report is estimated to show a 0.6% increase.
Fed Chair Powell will testify on the CARES Act at 9:00.
The Federal Open Market Committee will release its Beige Book on lth economy at 1:00. This book is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee. On each occasion, a different Federal Reserve district bank compiles anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts.
The long-term fundamentals remain bullish on balance for stock index futures.
CURRENCY FUTURES
It looks like the bull market for the U.S. dollar is over for now. The greenback has not performed well on bullish news in recent days.
The euro currency is higher despite news that the euro zone November manufacturing PMI was 58.4 when the forecast was 58.6.
Germany’s retail trade was 0.3% lower month-over-month in October 2021, following a revised 1.9% drop in September and missing market expectations of a 1.0% gain.
Annual house price growth in the U.K. accelerated slightly to 10.0% in November of 2021 from 9.9% in the previous month, and above market expectations of 9.3%.
INTEREST RATE MARKET FUTURES
Futures are lower after Fed Chair Powell’s hawkish testimony yesterday.
There is a double top in the March 30-year Treasury bond futures.
I expect this double top pattern will be taken out, and the longer-term trend appears to be higher.
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