E-mini on the rise, while equity futures weaken

October 28, 2016 4:59AM CDT

Equity futures rode the wave of data this morning, following a string of reports that reinforced the belief that the U.S. economy remains strong. The week culminated with third-quarter GDP results.

The December contract in E-mini S&P futures was last up .25 percent at 2,128.75, and analysts within the commodities futures markets say the trend for near-term equity futures prices is higher. The December contract in E-mini Dow futures was up .24 percent at 18,125, while the same contract month in E-mini Nasdaq futures rose .43 percent to 4,827.50.

Prices in equity futures weakened as the day continued, as a slew of mixed corporate earnings reports hit the commodities futures markets.

The latest report on the nation’s GDP showed an increase of 2.9 percent annually after expanding at a 1.4 percent pace in the second quarter, according to the U.S. Department of Commerce’s first estimate of growth. It compared to economists’ expectations of a rise of a 2.5 percent. The rate was the strongest since the third quarter of 2014. Some commodities futures participants say the report is not as positive as it first appears, citing the personal spending portion, which slowed to 2.1 percent compared to the second-quarter rate of 4.3 percent growth.

However, many analysts within the commodities futures markets say that although the Federal Reserve focuses on the monthly Employment Report and inflation, the most recent GDP figures could enhance the possibility of an interest rate hike in December from the Federal Open Market Committee.

The Employment Cost Index (ECI) rose 0.6 percent in the third quarter, as benefits advanced at the fastest pace in two years, and was in line with most economists’ expectations. The ECI is a closely followed gauge that reflects how much companies, governments and nonprofit institutions pay their employees in wages and benefits.

Adversely to the GDP data, the Consumer Sentiment index came in at 87.2 in October compared to expectations of a reading of 88.2, according to the University of Michigan. It was the lowest level since October 2014.

Commodities futures markets prices are expected to remain in mixed to higher territory, anticipating the next Fed move. On Friday, the probability that the FOMC will increase the fed likelihood that the Fed will raise rates at its June meeting is 89 percent, when 83 percent was predicted yesterday.

Emini Daily

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.