RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Overnight/Weekend
*Global Equities are modestly higher overnight, following a very strong open Sunday night open for US Index Futures. US Index Futs have since retreated. 

*Europe was mixed to lower overnight with the Germany +0.24% and Spain leading lower -0.62%

*Shanghai traded lower overnight following a strong PMI reading (strong Ag purchases), however showing further scarring was shown in their Bank stocks quarterly profits, which were the worst in a decade

*We continue to look at commodities assets as one of our favorite place to be going into year-end.  We’ll have more here. 

Top Market Movers Overnight

US Equities
*US Stocks are planning on leaving August with a bang…SP500 and Nasdaq traded up to 3524.50 and 12,091.75 overnight – but well off of those marks as we head into the NYSE open. 

*Stocks are incredibly strong, and perhaps a 3-5% correction is warranted, but we’re not seeing anything (technically) that can be construed as negative for equities.  *Fundamentally speaking, there’s plenty to be concerned about, specifically high levels of unemployment, and a rapidly declining Consumer Confidence outlook.

Treasuries/Yields
*The 10yr yield needs to be watched by everybody here as it threatens an “upturn” from depressed levels.  This obviously is not a “plus” for equities, and I know Powell and his crew are watching.

*Our contention is that the FED will NOT allow that to happen – we have seen weak bid-to-covers in the Wed 10yr auctions lately, as investors demand a higher yield for 10yr paper. 

*Weak bid to covers is where the Fed comes in.  It’s our view that the Fed could step in and begin to further monetize via purchases at debt auctions is suppress yields as they attempt to create inflation or “run the economy hot” so to speak. 

*Bonds and the Dollar are the 2 biggest risks (in my opinion) to this current market tape. 

Metals
*Gold opened strong – still holding above Friday’s close.  We’re going to upgrade our near-term view here, as we mentioned over the past couple of weeks that we thought an intermediate 3-6months top was in place.  It still may be, but the Fundamentals are still supportive of further gains, than further declines.  Same with Silver. 

*Again, the 2 biggest risks to the metals rally is the Bond market and the US Dollar. 

Agriculture
*Soybeans and Corn continue to forge higher on the Chinese demand narrative. 

*Soybeans up +7% in the last 2 weeks, but not signaling immediate-term overbought.  Dips should continue to be bought here.

*Corn +1.1% overnight bringing its 3 week rally to +11%

All the best, Good luck – keep an eye out for trade signals throughout the session!

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. Prior to becoming a broker he did some individual trading on his own, where he first began to study and interpret different market strategies and ideas. In 2006 John moved over to Lind-Waldock where he began to service clients as a professional broker. He joined RJO Futures in 2011. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.
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