Written Commentary
STOCK INDEX FUTURES
With approximately two-thirds of S&P 500 company earnings reports now in, results on average have beaten expectations.
The 2:00 central time December consumer credit report is expected to show a $16.2 billion increase.
Stock index futures have remained firm despite the continuing belief that the Federal Open Market Committee will be slow to lower interest rates this year. This suggests that some other bullish influence that is not yet obvious is supporting prices.
The fundamentals and technicals remain supportive to stock index futures.
CURRENCY FUTURES
The U.S. dollar index is lower today, although interest rate differentials remain supportive to the greenback in the longer term.
Germany’s industrial production declined more than anticipated in December, posting the seventh consecutive month of falling output. Output declined 1.6% compared with the previous month, from an upwardly revised 0.2% decline in November. This compared with a forecast of a 0.3% contraction. For the entire year of 2023 industrial production fell 1.5%.
INTEREST RATE MARKET FUTURES
Futures are mostly lower, especially at the long end of the curve.
The Treasury will auction 10-year notes today.
Federal Reserve speakers today Adriana Kugler at 10:00, Susan Collins at 10:30, Thomas Barkin at 11:00 and Michelle Bowman at 1:00.
Financial futures markets are predicting there is a 20% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at the March 20 meeting and an 80% chance that the Fed will keep rates unchanged.
The fundamentals are mixed.
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