Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures remain near record highs. Recent gains have been linked to strong earnings growth.
Analysts expect second-quarter earnings growth at 92.9% for S&P 500 companies, according to IBES data from Refinitiv. Of the 427 companies in the index that have reported results so far, 87.6% beat analyst expectations, which is the highest on record.
The 9:00 central time June JOLTS report is expected to show 9.285 million. JOLTS stands for Job Openings and Labor Turnover Survey. The Labor Department’s JOLTS report tracks monthly changes in job openings and offers rates on hiring and quits.
The fundamentals and technical aspects remain positive for stock index futures.
CURRENCY FUTURES
Strength in the U.S. dollar index on Friday was linked to increased expectations of an early tapering of the Federal Reserve’s asset-purchase program.
At the same time, traders are anticipating the European Central Bank will remain dovish for some time, after policymakers pledged last month to keep interest rates at record-low levels for even longer in an effort to bring inflation back to its 2.0% target. The updated guidance pushed expectations for an interest rate increase further into the future as the ECB sees inflation below 2.0% until at least 2023.
Germany’s trade surplus widened to EUR 16.3 billion in June 2021, from EUR 15.4 billion in the same period last year. Exports rose 23.6% to the highest level since March’s record high. Imports advanced 27.0%.
INTEREST RATE MARKET FUTURES
Futures declined at the long end of the curve on Friday due to increased expectations of an early tapering of the Federal Reserve’s asset-purchase program.
Traders are looking ahead to the meeting of Federal Reserve leaders in Jackson Hole, Wyoming later this month. The Federal Reserve Bank of Kansas City is proceeding with plans to host a modified, in-person program for this year’s Economic Policy Symposium, “Macroeconomic Policy in an Uneven Economy,” in Jackson Hole, Wyoming, Aug. 26-28, 2021.
Federal Reserve speakers today are Raphael Bostic at 9:20 and Thomas Barkin at 10:30.
Futures are holding up well for the news. Some traders are questioning why the 30-year Treasury bond futures are 10 full points off of their May lows, as tapering talk ramps up.
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