Fundamentals Remain Bullish

STOCK INDEX FUTURES

Jobless claims in the week ended August 27 were 232,000 when 246,000 were expected.

The 8:45 central time August PMI manufacturing final is anticipated to be 51.3.

The 9:00 August Institute For Supply Management manufacturing index is estimated to be 52.0.

The 9:00 July construction spending report is predicted to be unchanged from the previous month.

Stock index futures are likely to have a difficult time advancing as Federal Reserve officials  are becoming more hawkish in their rhetoric.

CURRENCY FUTURES

The U.S. dollar is higher and is close to hitting 20-year highs.

US $100 Bill

The long term trend for the U.S. dollar is higher as Federal Reserve officials have become even more hawkish in their rhetoric this week.

The euro currency fell below $1.00, holding close to 20-year lows.

The unemployment rate in the euro area edged down to a record low of 6.6% in July of 2022 from an upwardly revised 6.7% in the previous month, which was in line with market expectations. The number of unemployed people fell 77,000 in July to 10.98 million.

The European Central Bank may raise its key interest rate by 75 basis points at its policy meeting on September 8 in response to Wednesday’s record high inflation reading.

INTEREST RATE MARKET FUTURES

Futures are lower as Federal Reserve officials have become even more hawkish in their rhetoric this week, indicating the Federal Reserve is planning to continue to hike interest rates this year through  2023.

Raphael Bostic of the Federal Reserve will speak at 2:30.

According to financial futures markets, there is a 28.0% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 72.0% probability that the rate will increase by 75 basis points at the September 21 policy meeting.

The inverted Treasury yield curve continues to flash warnings of economic risks ahead.

The interest rate market futures are likely to have a difficult time advancing as Federal Reserve officials  are becoming more hawkish.

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