Written Commentary
STOCK INDEX FUTURES
The Senate approved a short-term spending bill yesterday to avert a government shutdown after the House passed a continuing resolution on Tuesday.
Jobless claims in the week ended November 11 were 231,000 when 222,000 were expected.
The November Philadelphia Federal Reserve manufacturing index was -5.9 when -11.0 was anticipated.
Industrial production in October was down 0.6% when down 0.3% was estimated in capacity utilization was 78.9%, which compares to the forecast of 79.4%.
The 9:00 central time November housing market index is expected to be 40.
The November Kansas City Federal Reserve manufacturing index will be released at 10:00. In October it was -8.0.
The technical aspects have become much more supportive to stock index futures this week, especially after on Tuesday the S&P 500 futures broke out above a triple top formation on the daily chart.
CURRENCY FUTURES
The U.S. dollar was slightly higher in the overnight trade but came under pressure when the larger than estimated jobless claims report was released.
Severe technical damage was done to the greenback earlier this week when major trendlines were penetrated on the downside.
Exports from Japan increased by 1.6% year-over-year in October 2023, expanding for the second consecutive month, beating market forecasts of a 1.2% gain.
Australia’s labor market increased more than expected in October as the labor participation rate returned to record highs. The total number of employed people grew by 55,000 in October, which was substantially higher than expectations for an increase of 20,000 people, and accelerated sharply from the 6,700 gain in September.
INTEREST RATE MARKET FUTURES
Futures firmed when the larger than predicted jobless claims report was released.
Federal Reserve speakers today are Christopher Waller at 9:30, Michael Barr at 9:35, Loretta Mester at 11:00 and Lisa Cook at 11:00.
Despite recent hawkish comments from Federal Reserve officials, there is a growing consensus that the Federal Reserve has concluded its rate hiking cycle.
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 its December 13 policy meeting. On Monday there was a 14% probability of a 25 basis point hike.
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