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Fundamentals Stay Bullish


Stock index futures are higher.

bull and bear

The 8:45 central time August PMI final is expected to be 45.0.

The 9:00 August Institute for Supply Management services index is anticipated to be 55.4.

There may be some additional bounce today since so much of the commentary and sentiment is overwhelmingly bearish.


The U.S. dollar index advanced to a 20-year high yesterday.

The long term trend for the U.S. dollar is higher as Federal Reserve officials have become even more hawkish in their rhetoric recently.

The euro currency is lower on news that German factory orders fell for the sixth consecutive month in July. New orders in Germany’s manufacturing sector decreased 1.1% on the month. The reading missed the consensus forecast of a 0.5% decline.

The S&P Global euro zone construction PMI fell to 44.2 in August of 2022 from 45.7 in July, pointing to a fourth consecutive month of falling construction and the steepest since January of last year.

The European Central Bank may raise its key interest rate by 75 basis points at its policy meeting on September 8 in response to last week’s record high inflation reading.

The Japanese yen fell to a new 24-year low today as the Federal Reserve is expected to continue to hike interest rates aggressively, while the Bank of Japan has now held short-term rates in negative territory for more than six years.

Japan’s households cut back on spending in July, while real wages fell again. Household outlays dropped 1.4% from June

The Reserve Bank of Australia raised the cash rate by 50 basis points to 2.35% at its policy meeting today, as expected, bringing the cash rate to a level not seen since January 2015.


According to financial futures markets, there is a 32.0% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 68.0% probability that the rate will increase by 75 basis points at the September 21 policy meeting.

The inverted Treasury yield curve continues to flash warnings of economic risks ahead.

The bearish influence of the hawkish Federal Reserve is currently outweighing the bullish influence of a weakening U.S. economy.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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