Written Commentary
Ag Market View for July 26.24
July 26, 2024
STOCK INDEX FUTURES
U.S. stock index futures are lower due to continued uncertainties about the debt ceiling, the Federal Reserve possibly tapering its $120 billion a month in asset-purchases, the global chip shortage, concerns around slowing global economic growth and weakening sentiment in Asia and Europe.
On the bullish side is the historically low fed funds rate of zero to 25 basis points that is unlikely to be increased any time soon.
Investors are watching negotiations in Congress closely, as lawmakers debate increasing the debt ceiling ahead of a deadline this month.
In Asia, most major stock markets pulled back, although markets in mainland China are closed until Friday for the Golden Week holiday.
The 9:00 central time August factory orders report is expected to show a 1.0% increase.
There have been so many bearish articles on the outlook for stock index futures in recent days, which suggests from a contrary point of view, that a bottom is likely soon.
Despite the recent pressure, the longer-term fundamental and technical aspects remain supportive for stock index futures.
CURRENCY FUTURES
After the U.S. dollar index advanced to a one-year high last week, the greenback has weakened over the past three trading days.
The euro currency is higher as borrowing costs in the euro zone nudged up on Monday.
Fumio Kishida took office as Japan’s new prime minister on Monday, forming a Cabinet that will seek to revive the economy.
INTEREST RATE MARKET FUTURES
Futures at the long end of the curve are lower.
The yield on the benchmark 10-year Treasury note ticked up to 1.494% Monday, from 1.464% on Friday.
Federal Reserve speakers today are Eric Rosengren at 9:00 and James Bullard at 9:00.
There is a consensus view that the Federal Reserve will announce a tapering of its $120 billion a month in its asset-purchase program at its November policy meeting.
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