Explore More Commentaries
E-Mini S&P 500: Employment on tap

The Non-farm Payrolls forecast at 168,000 while the previous reading was 151,000. Any number much lower may have a sentiment change. The Fed is

FX Board: USD trying to spread its wings

The US dollar picked up the pace again today after an early dip, with a new low for the cycle in GBPUSD coming alongside a rise in dollar/yen. To

The Energy Report: In The Eye of the Storm

Crude oil prices are just shy of $50.00 as Hurricane Matthew is barreling towards the East Coast. U.S. oil supply continues to fall and OPEC and

Grain Traders Positioning For Next Move

Good Morning! Paul Georgy with the early morning commentary for October 6, 2016 Grain markets are mostly lower as weather forecasts open up for

BT Morning Call for October 6

OVERNIGHT MARKETS AND NEWS Dec E-mini S&Ps (ESZ16 -0.16%) are down -0.21% and European stocks are down -0.24% as speculation mounts that the

Strong NFP could see USD rally for real

After a head-spinning comeback in the ISM non-manufacturing survey in September, a November Federal Reserve rate hike could even be in play if

The Energy Report: Goodbye Oil Glut

While global markets are worried about EU tapering and the possibility off a hard Brexit, oil seems oblivious to those threats as the US oil glut is

BT Morning Call for October 5

OVERNIGHT MARKETS AND NEWS Dec E-mini S&Ps (ESZ16 +0.01%) are down -0.08% and European stocks are down -0.65% on the prospects for tighter Fed

Money On The Move Support Grains

Good Morning!Paul Georgy with the early morning commentary forOctober 5, 2016 Grain marketsare mixed as global supplies continue to grow. The US

Commentary

Indices

E-Mini S&P 500: Signs of strength!

Commentary — DeWayne Reeves Date — October 5, 2016

Share:
159 views0 comments — Join The Discussion
—S&P 500 Index

The ADP is often viewed as a precursor to the Friday Employment report. The ADP Employment Report for September was 154,000 while the previous reading was 177,000. The Non-farm Payrolls forecast at 168,000 while the previous reading was 151,000. The Unemployment Rate is forecast at 4.9 % while the previous reading was 4.9 %. The Private Payrolls is forecast at 170,000 while the previous reading was 126,000. The Average Hourly Earnings is forecast at 0.3 % while the previous reading was 0.1 %. The Average Workweek is forecast at 34.4 hours while the previous reading was 34.3. The ISM Non-Manufacturing Index for September was 57.1 while the previous reading was 51.4. This is the highest it has been for about a year. International Trade for August was widened by 3 % to -$40.7 billion while the previous reading was -$39.5 billion. The higher exports unfortunately were offset by the higher imports. Traders will be watching for clues from the data between now and the December Fed meeting December 13th – 14th! Labor, wage growth and consumer spending may give some ideas of how the Fed may introduce the next interest rate hike. It still is unclear whether the Fed will introduce a rate hike this year or perhaps hold off yet again. Accommodative bodes well for the indexes! It is thought that 93 % of this move up is by the Fed moves. Growth is there, but perhaps the Fed wants to get thru the election. Naturally, we expect a possible overshoot in inflation. The inflation rate may be close to the Fed target thus adding to the query about when the Fed may raise interest rates. The labor sector appears to be the strength, yet consumer spending and inflation should be also considered. There is also a Fed meeting in November, but most analysts believe that it is too close to the election for the Fed to introduce a rate hike. Dell Technologies may be laying off 2,000 to 3,000 employees perhaps in the administration, marketing and supply chain areas. K-Mart may also be laying off thousands of workers as it closes stores. This comes after the last Non-Farm Payrolls showing a meager 151,000 new jobs created in the month of August. It would seem that the Fed may attempt to brighten the forecast of a rate hike for Christmas perhaps. The International Monetary Fund decreased their projection of US growth to 1.6 % down from the 2.2 %.

Deutsche Bank AG (DB) dodged a bullet for a high settlement by being offered a reduced $5.4 billion by the US Justice Department as reported by Agence France-Presse. This may just be a bandage on an artery, but Wall Street sentiment seemed to shrug its shoulders again. Deutsche Bank AG (DB) was up 1.95 % to $13.59 in response to the smaller settlement of $5.4 billion while the US Justice Department initially charged them to deal with issues potentially up to $14 billion. The news created a snowball effect that created concerns for the banking system in general and the markets. The valuations of the indexes have been lofty for some time and the doubt that the banking system created could cause added vulnerability. The elections have traders already concerned about the US as a whole. Germany has been known as a financial giant and the strength of the European Union. This event along with Brexit will be very difficult to absorb. It is not the fine itself as much as the funds pulling out of the bank and the possible exodus of their client base that may be the downfall. Particularly as German Chancellor Merkel already stated that a bank bailout was not on the agenda. The current environment for banks with negative interest rates and increased regulations on their capital requirements is getting more challenging. Other banks such as Commerzbank AG is planned to cut jobs and reduce exposure in other areas to meet the challenges of today’s banking industry. Credit Suisse Group AG may have some cost reductions while Deutsche Bank may have a complete restructuring for at least the next year. UK Prime Minister Theresa May had said a couple of days ago that Britain’s withdrawal from the European Union may begin in the first quarter of 2017. It is not thought to be a smooth exit. The European Central Bank may gradually close the quantitative easing bond purchases early before the March 2017 close. The International Monetary Fund is venting concerns as of late in regards to the global $152 trillion debt. Slow global growth make the prospects of balancing the debt a risk to the financial stability in the world economy.

The EIA Crude Oil Stocks were a draw of 2.97 million barrels with stocks at 499.74 million barrels. The API Petroleum Stockpiles were down 7.6 million barrels as of this afternoon. Russian President Putin and Saudi leaders are attempting to stabilize the oil markets. OPEC members of Libya and Nigeria are thought to boost production in the coming weeks. Saudi Energy Minister, Khalid al-Falih announced that the Algeria’s oil OPEC agreed on cuts in output to 32.5 – 33.0 million barrels a day. Iran had been at pre-sanction levels of 4.2 million barrels a day. Tehran was asked to keep levels at 3.6 million barrels per day but now wants to boost production to 4 million barrels a day. The Saudi’s had bumped up production to 10.67 million barrels in July while June hit 10.55 million barrels a day. The Organization of the Petroleum Exporting Countries (OPEC) had stated previously that they would like to see Crude Oil maintain a $50.00 price level. Most analysts may believe that the level may hard to keep and that the Crude Oil remains fragile and due for dips. The previous level that they were keen on keeping was $100.00 a barrel in year’s past. Iran did state that they need $100.00 a barrel to balance their budget. US shale companies need $60.00 per barrel to cover their cost of production to be profitable. Russia is eager to participate while a non-member country. Iran continues to produce based on previous sanctions. If the Crude Oil could maintain $50.00, the indexes may be further supported. The energies were also influenced by wildfires out of Canada and disruption in Nigeria which destroyed about 3 million barrels a day. If the talks in Algiers are laying groundwork for the next OPEC meeting of November 30th, then progress may still be on the table. The National Iranian Oil Company reached an accord of a $2.2 billion deal with Persia Oil & Gas Industry Development Company. The contract will be part of a final deal in about 6 months.

The VIX CBOE Volatility Index was down 4.70 % to 12.99 today. Some investors may use the VIX as a tool to hedge the indexes or a stock portfolio. The VIX is the Chicago Board of Options Exchange Volatility Index which usually trades inversely to the stock indices. So far for the Q3:2016, 18 companies of the Standard & Poor’s 500 have reported earnings, 15 have exceeding earnings expectations while 11 have exceeded sales expectations as of September 30th.

The MBA Mortgage Applications for the week of September 30th Composite Index was 2.9 % while the previous reading was -0.7 %. The Purchase Index was -0.1 % while the previous reading was 1.0 %. The Refinance Index was 5.0 % while the previous reading was -2.0 %. The ADP Employment Report for September was 154,000 while the previous reading was 177,000. International Trade for August was -$40.7 billion while the previous reading was -$39.5 billion. The Gallup US Job Creation Index for September was 33 while the previous reading was 33. The PMI Services Index for September was 52.3 while the previous reading was 51.0. Factory Orders for August was 0.2 % while the previous reading was 1.9 %. The ISM Non-Manufacturing Index for September was 57.1 while the previous reading was 51.4. The Gallup US ECI for September which was -10 while the previous reading was -11. Redbook Store Sales for the week of October 1st was 1.3 % while the previous reading was 0.2 %. Total Motor Vehicle Sales for September were 17.8 million annualized rate while the previous reading was 17.0 million annualized rate. The Domestic Vehicle Sales were 14.2 million annualized rate while the previous reading was 13.4 million annualized rate. The Gallup US Consumer Spending Measure for September was $91 while the previous reading was $91. The PMI Manufacturing Index for September was 51.5 while the previous reading was 52.0. The ISM Manufacturing Index for September was 51.5 while the previous reading was 49.4. Construction Spending for August was -0.7 % while the previous reading was 0.0 %. The Real GDP for Q2f:2016 was 1.4 % while the previous reading was 1.1 %. The GDP Price Index was 2.3 % while the previous reading was 2.3 %. The Nonfarm Payrolls for August was 151,000 while the previous reading was 255,000. The Unemployment Rate was 4.9 % while the previous reading was 4.9 %. The Private Payrolls was 126,000 while the previous reading was 217,000. The Average Hourly Earnings was 0.1 % while the previous reading was 0.3 %. The Average Workweek was 34.3 hours while the previous reading was 34.5.

•Thursday, we look forward to the Initial Jobless Claims for the week of October 1st forecast at 256,000 while the previous reading was 254,000.

•Friday, we look forward to the Non-farm Payrolls forecast at 168,000 while the previous reading was 151,000. The Unemployment Rate is forecast at 4.9 % while the previous reading was 4.9 %. The Private Payrolls is forecast at 170,000 while the previous reading was 126,000. The Average Hourly Earnings is forecast at 0.3 % while the previous reading was 0.1 %. The Average Workweek is forecast at 34.4 hours while the previous reading was 34.3. Consumer Credit for August is forecast at $16.6 billion while the previous reading was $17.7 billion.

Thursday, what to expect? We maintain a now bullish bias unless the (December) E-Mini S&P 500 penetrates $2112.25. Thursday, we anticipate an inside to higher to inside day! Today's range was $2158.00 - $2141.00. The close was $2153.25. Our comfort zone or point of control for this market (December) appears to be $2151.00. Our potential range for Thursday’s trading could be $2157.50 - $2142.50.

E-Mini S&P 500 Chart

 

—Advertisement

Full service commodity broker specializing in grain and livestock trading for over 20 years

—Bull Trend

Comments

Have something to say?

Sign in or register
to leave a comment
Explore More Commentaries
E-Mini S&P 500: Employment on tap

The Non-farm Payrolls forecast at 168,000 while the previous reading was 151,000. Any number much lower may have a sentiment change. The Fed is

FX Board: USD trying to spread its wings

The US dollar picked up the pace again today after an early dip, with a new low for the cycle in GBPUSD coming alongside a rise in dollar/yen. To

The Energy Report: In The Eye of the Storm

Crude oil prices are just shy of $50.00 as Hurricane Matthew is barreling towards the East Coast. U.S. oil supply continues to fall and OPEC and

Grain Traders Positioning For Next Move

Good Morning! Paul Georgy with the early morning commentary for October 6, 2016 Grain markets are mostly lower as weather forecasts open up for

BT Morning Call for October 6

OVERNIGHT MARKETS AND NEWS Dec E-mini S&Ps (ESZ16 -0.16%) are down -0.21% and European stocks are down -0.24% as speculation mounts that the

Strong NFP could see USD rally for real

After a head-spinning comeback in the ISM non-manufacturing survey in September, a November Federal Reserve rate hike could even be in play if

The Energy Report: Goodbye Oil Glut

While global markets are worried about EU tapering and the possibility off a hard Brexit, oil seems oblivious to those threats as the US oil glut is

BT Morning Call for October 5

OVERNIGHT MARKETS AND NEWS Dec E-mini S&Ps (ESZ16 +0.01%) are down -0.08% and European stocks are down -0.65% on the prospects for tighter Fed

Money On The Move Support Grains

Good Morning!Paul Georgy with the early morning commentary forOctober 5, 2016 Grain marketsare mixed as global supplies continue to grow. The US