Written Commentary
STOCK INDEX FUTURES
S&P 500, Dow, NASDAQ and Russell 2000 futures hit record highs yesterday but are lower today. Recent gains are linked to optimism toward more economic stimulus.
Some of the selling today can be linked to news that the January National Federation of Independent Business small business optimism index was 95, which compares to the expected 98.
The 9:00 central time December Job Openings and Labor Turnover Survey, “JOLTS,” is anticipated be 6.4 million. The Labor Department’s JOLTS report tracks monthly changes in job openings and offers rates on hiring and quits.
I would not be surprised to see a move to higher on the day from the current lower levels.
CURRENCY FUTURES
The U.S. dollar continued lower today after on Friday it fell under an eight-day uptrend line.
The euro currency is higher after a report showed German exports continued their recovery in December. Exports increased 0.1% in December from November in adjusted terms when economists had forecast a 0.5% decrease in adjusted terms. Imports in December fell 0.1% on month.
Germany’s trade surplus, the balance of exports and imports of goods, totaled 16.1 billion euros in calendar and seasonally adjusted terms in December. Economists forecast the trade surplus at 6.5 billion euros.
Some analysts believe the slow euro zone economic recovery makes it more likely that the European Central Bank will increase the size of its quantitative easing program.
The Australian dollar is higher on news that Australia’s business confidence improved in January, improving 5 index points to 10 points.
INTEREST RATE MARKET FUTURES
The 30-Year Treasury bond futures advanced on news that the January National Federation of Independent Business Small Business Optimism Index was weaker than predicted.
James Bullard of the Federal Reserve will speak at 11:00.
The Treasury will auction 3-year notes today.
In light of the Federal Reserve pledging not to hike its fed funds rate until possibly 2023, futures at the short end of the curve are likely to hold steady.
Futures at the long end of the yield curve will likely remain in a broad trading range, as the fundamentals are now mixed.
The next Federal Open Market Committee meeting is scheduled for March 17.
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