Guest Commentary by Matt Zeller, Senior Market Intelligence Analyst
February 29 – Dow Jones futures reversed course to indicate a higher open this morning following the release of PCE index data for January; the lack of a surprise there encourages the trade, even if it’s unlikely to budge the Fed from their cautious outlook in early 2024. We’ve seen three straight minor losing session by the Dow this week but values remain very near last Friday’s record high, and the benchmark index is set to post its biggest gains for Jan-Feb since before the pandemic. Volatility remains low with the VIX down and trading below 14.
Initial jobless claims for the week ending February 24 came in at 215k, above the average 210k trade estimate, with the previous week revised slightly higher as well (from 201k to 202k). Continuing claims for the previous week also came in above estimates at 1.905 million, up from the average 1.875 mln guess and 1.860 mln the week prior. It would appear that U.S. employers are cutting back on hiring but also not laying off workers; the labor market has remained pretty strong even through the interest rate run-up.
Personal income for the month of January rose by an even percentage point from December, ahead of the average 0.4% expectation and 0.3% in Dec; personal spending matched estimates at 0.2% in Jan, down from 0.7% in Dec. The PCE Core Deflator rose 0.4% month-over-month and 2.8% year-over-year, matching trade estimates, with the MoM reading ticking higher compared to December – that does little to calm the fears of the Federal Reserve using caution before bringing interest rates back down in 2024, with preferred inflation measures proving sticky still.
U.S. exporters sold just 5.9 million bushels of soybeans on the week ending February 22, after a marketing-year low 2.1 mbu sales total the week prior. China was the leading buyer at just 5.7 million bushels, but 14.4 mbu were cancelled out of the “unknown” category for the second straight week. Cumulative sales to China stand at 813 mbu through right around half the 2023/24 marketing season, down from 1108 mbu last year, with soybean sales to all destinations at 1434 mbu, down from 1778 mbu LY. Seasonally, overall soybean export sales are now 29 mbu or 2% behind the pace needed to meet the current USDA estimate, and that number is falling rapidly. Soybeans are down double-digits this morning after failing to hold at matching lows from two of the last three sessions; we’ve had a period of high prices since late 2020 but it’s now looking like a return to the level of the six years prior, when spot soybeans hung generally in the $8-11/bushel range through a series of strong crops…
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI . StoneX is a trading name of StoneX Financial Ltd (“SFL”). SFL is registered in England and Wales, Company No. 5616586. SFL is authorized and regulated by the Financial Conduct Authority [FRN 446717] to provide to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorised to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorised & regulated by the Financial Conduct Authority under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorised by the Financial Conduct Authority. StoneX Group Inc. acts as agent for SFL in New York with respect to its payments services business. StoneX APAC Pte. Ltd. acts as agent for SFL in Singapore with respect to its payments services business. ‘StoneX’ is the trade name used by StoneX Group Inc. and all its associated entities and subsidiaries.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
© 2024 StoneX Group Inc. All Rights Reserved.
Discover more insights
