Stock Indexes Higher Again Today
STOCK INDEX FUTURES
Some of the gains yesterday in stock index futures were linked to news that U.S. home sales surged to their highest level in almost 14 years in August, as the housing market continued to outperform the broader economy. The National Association of Realtors said on Tuesday that existing home sales increased 2.4% to a seasonally adjusted annual rate of 6 million units last month, which is the highest level since December 2006.
U.S. stock index futures are higher for a second day today, as investors await economic data and a second day of congressional testimony by Federal Reserve Chairman Jerome Powell at 9:00 central time.
Mortgage applications to purchase a home increased 3.0% for the week and were 25% higher from a year ago.
The 8:45 central time September PMI composite index is expected to be 54.5.
The U.S dollar is higher, and the euro currency is lower. Some of the strength in the greenback is by default as several recent economic reports in Europe have come in on the weak side.
The euro currency came under pressure on news that the euro zone September composite PMI flash was 50.1 when 51.6 was forecast.
German consumer sentiment is likely to stabilize in October, following a downturn in the previous month, according to market-research group GfK.
INTEREST RATE MARKET FUTURES
Futures are steady at the front of the yield curve and are lower at the long end of the curve despite comments from the Fed’s Clarida when he said the Fed expects to keep rates lower for longer.
The Treasury will auction five-year notes today.
In addition to Federal Reserve Chair Powell, other Federal Reserve speakers today are Charles Evans at 10:00, Eric Rosengren at 11:00, Raphael Bostic at 12:00, Neel Kashkari at 12:00 and Mary Daly at 2:00.
Interest rate market futures at the short end of the curve are likely to be supported by ideas that major central banks, including the Federal Reserve, will keep short term interest rates low for an extended period. Many analysts believe it will be several years, possibly not until 2023, before the Federal Reserve will be in a position to hike its fed funds rate.
However, futures at the long end of the curve, especially the 30-year Treasury bond futures may be undermined by the inflationary aspects of the Federal Reserve’s “average inflation targeting” policy.
Financial futures markets are predicting there is almost a 100% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at the November 4-5 policy meeting.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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.