Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
by Alan Bush
STOCK INDEX FUTURES
Stock index futures are higher due to U.S.-China trade talk optimism. International equity markets advanced as well as China indicated its phase-one trade deal with the U.S. remained on track.
Investors’ sentiment improved by a report that top trade negotiators for the U.S. and China spoke on the telephone today, pledging to create favorable conditions for their phase-one trade agreement.
NASDAQ futures are higher on the year and have been off and on since the end of April.
Nonfarm payrolls in April fell 20,500,000 when a decline of 21,500,000 was expected and the unemployment rate was 14.7%, which compares to the anticipated 16.4%.
Higher crude oil prices also supported stock index futures.
In recent weeks stock index futures have overperformed the news.
CURRENCY FUTURES
The euro currency is higher despite news that German exports in March recorded their steepest monthly decline since the data was first published in August 1990.
German exports dropped 11.8% in March from February in adjusted terms. Economists had forecast a 5.0% decline. Imports fell 5.1% on month, showing the largest month-on-month decline since January 2009 when they fell 6.5%.
The Japanese yen is lower as flight to quality longs are liquidated in light of higher stock index futures. The yen is lower despite news that Japan’s March all household spending fell 6.0% on the year when a decline of 6.2%was estimated.
The Australian dollar is higher even though the Reserve Bank of Australia said it expects Australia’s economy will contract 6.0% in calendar year 2020.
INTEREST RATE MARKET FUTURES
Safe haven longs are being liquidated today.
Yesterday two Federal Reserve officials, Federal Reserve Bank of Minneapolis President Neel Kashkari and Federal Reserve Bank of Atlanta President Raphael Bostic said they believe the U.S. economy can likely avoid a worst-case scenario.
The 30-year Treasury bond futures remain in a broadly based congestion pattern as the main fundamental influences affecting the long end of the curve are offsetting.
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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.
