Written Commentary
STOCK INDEX FUTURES
Stock index futures are lower.
Traders are awaiting economic data due later in the week, including the December CPI, the December PPI and the kick-off of the earnings season.
The 9:00 central time November wholesale inventories report is expected to show a 0.1% decline.
The fundamentals and technicals remain supportive to stock index futures longer term despite recent talk of a potentially less dovish Federal Reserve in 2024.
INTEREST RATE MARKET FUTURES
The Treasury will auction 10-year notes today.
John Williams of the Federal Reserve will speak at 2:15.
Traders continue to believe the Fed will cut interest rates this year but not at the January meeting.
Financial futures markets are predicting there is a 5.0% probability that the Federal Open Market Committee will reduce its fed funds rate by 25 points at its January 31, 2024 policy meeting and a 95% probability of no change.
CURRENCY FUTURES
The U.S. dollar index is lower
Lower prices are likely for the U.S. dollar longer term.
Germany’s industrial production fell in November for a sixth-straight month. Output declined 0.7% compared with the previous month from an upwardly revised 0.3% drop in October. This compared with a forecast of zero growth.
Australia’s consumer price index for November increased by only 4.3%, which is the lowest in almost two years and down from October’s 4.9%.
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