Written Commentary
Index Prices Decline with GDP Report
April 25, 2024
STOCK INDEX FUTURES
Stock index futures are higher for the fourth day of gains. The advance is being led by the NASDAQ, which hit new record highs, as investors’ focus switched to strong corporate earnings results.
In addition, traders have been encouraged by the Federal Reserve, which said it doesn’t plan to pull back on supportive policies in the near term.
The 8:45 central time July PMI manufacturing index is expected to be 62.1.
The technical aspects remain positive for stock index futures.
CURRENCY FUTURES
The U.S. dollar index remains near a four-month high as demand for safe-haven assets remains strong.
In the weeks ahead it is likely that the flight to quality influence that the greenback has enjoyed recently will dominate over other market influences.
The euro currency firmed on news that the IHS Markit euro zone composite PMI rose to 60.6 in July 2021, from 59.5 in the previous month and above market forecasts of 60.0.
The IHS Markit Germany composite PMI advanced to 62.5 in July, easily surpassing market expectations of 60.8.
Retail sales in the U.K. were up 0.5% month-over-month in June of 2021, following a downwardly revised 1.3% increase in May and slightly higher than the forecasts of a 0.4% gain.
The IHS Markit/CIPS U.K. composite PMI fell to 57.7 in July 2021, from 62.2 in the previous month and well below market expectations of 61.7.
INTEREST RATE MARKET FUTURES
Some flight to quality longs are being liquidated in light of strong stock index futures.
The interest rate futures markets have been telegraphing for several months clues about the state of the global economy.
The U.S. Treasury yield curve has been flattening since May. Shorter-dated yields have been steady, while longer-dated yields have declined. A flattening yield curve suggests a slower rate of economic growth in the future.
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