Corporate Earnings Support SIF’s

STOCK INDEX FUTURES

Stock index futures are higher due to better than expected corporate earnings reports.

The 8:45 central time October services Purchasing Managers’ Index is anticipated to be 49.4.

The October Richmond Federal Reserve manufacturing index will be released at 9:00. The September figure was 5.

CURRENCY FUTURES

The U.S. dollar is higher after briefly falling to a one-month low in the overnight trade. Weak economic data in the euro zone pressured the euro currency and supported the greenback.

A survey showed euro zone business activity took a surprise turn for the worse in October, suggesting the bloc may slip into a recession.

The HCOB euro zone composite Purchasing Managers’ Index declined to 46.5 in October 2023, which is down from September’s 47.2 and falling short of the market consensus of 47.4. This latest reading is the fifth consecutive month of falling business activity and the steepest drop since November 2020.

There has been only a limited flight-to-quality flow of funds into the greenback, which is a sign of longer-term weakness.

U.K. businesses reported another decline in activity this month. The “flash” preliminary reading of the S&P Global U.K. Purchasing Managers’ Index for the services sector fell in October to 49.2 from 49.3 in September, which is the lowest reading since January. Economists predicted an unchanged reading.

The au Jibun Bank Japan Composite Purchasing Managers’ Index declined to 49.9 in October 2023 from 52.1 in September.

INTEREST RATE MARKET FUTURES

Futures are lower with virtually no flight to quality buying recently in light of the conflict in the Middle East, which is surprising and a sign weakness.

Some analysts believe the underperforming futures market can be explained by concerns about increasing government offerings of Treasury issues to cover widening deficits.

The Treasury will auction two-year notes today.

Financial futures markets are now predicting there is a 99% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its November 1 policy meeting.

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