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Indices Likely to Recover Later Today


Stock index futures declined when the employment data was released at 7:30 central time.

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The stronger than predicted employment report is short-term bearish because it could influence the Federal Reserve to become more hawkish.

Nonfarm payrolls in November were up 263,000 when an increase of 200,000 was expected and  the unemployment rate was 3.7%, as anticipated.

The labor participation rate was 62.1% when 62.3% was predicted.

Hourly earnings were up 0.6% when up 0.3% was estimated.

The average workweek was 34.4 hours when 34.5 hours were expected.

Despite lower prices today the fundamentals and technicals for stock index futures remain supportive.

At least a partial recovery is likely this afternoon.


Yesterday the U.S. dollar index fell to its lowest level since August 11. However, the greenback is higher today in response to the on-balance better than expected employment numbers.

Despite higher prices today, interest rate differential expectations long-term bearish for the greenback.

Lower prices are likely this afternoon for the U.S. dollar from the current higher prices.

The euro currency is higher in spite of news that producer price inflation in the euro area slowed sharply to 30.8% year-on-year in October 2022, which is down from September’s 41.9% and August’s record high of 43.4%, and coming in below market expectations of 31.5%.

Bank of Japan Governor Kuroda said inflation rates around the world are expected to slow gradually.


Futures came under pressure when the employment report was released.

According to financial futures markets currently, there is a 70.0% probability that the Federal Open Market Committee will increase its fed funds rate by 50 basis points at the December 14  policy meeting and a 30.0% probability that the rate will be hiked by 75 basis points.

The fundamental and technical aspects have turned more supportive for futures.

At least a partial recovery is likely this afternoon.


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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.

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