Written Commentary
STOCK INDEX FUTURES
Stock index futures are higher.
Jobless claims in the week ended August 20 were 243,000 when 255,000 were expected.
The second estimate of second quarter GDP was negative 0.6%, which compares to the anticipated negative 0.9% annualized contraction.
The August Kansas City Federal Reserve manufacturing index will be released at 10:00 central time. The index last month was 13.
Stock index futures are likely to have a hard time advancing this week ahead of the Federal Reserve’s annual Jackson Hole, Wyoming economic symposium on August 25-27. Federal Reserve Chairman Jerome Powell will likely stress that tightening has a long way to go when he speaks on Friday at 9:00 a.m.
CURRENCY FUTURES
Higher prices are likely for the U.S. dollar from the current level in advance of Fed Chair Powell’s likely hawkish comments at Jackson Hole on Friday.
The Ifo business climate index in Germany declined to 88.5 in August from a revised figure of 88.7 in July. Economists had expected the index to come in at 87.2.
The index of the current situation fell to 97.5 in August from 97.7 the prior month, while the gauge assessing companies’ expectations fell to 80.3 from 80.4.
The Ifo index is based on a poll of approximately 9,000 companies in manufacturing, services, trade and construction.
INTEREST RATE MARKET FUTURES
Federal Reserve Bank of Atlanta President Raphael Bostic said stronger data could tip the Fed toward a 75 basis point rate increase.
The Treasury will auction 7-year notes.
According to financial futures markets, there is a 39.5% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 60.5% 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.
Futures will have a hard time rallying this week ahead of the Federal Reserve’s Jackson Hole economic symposium.
I will be out of the office tomorrow.
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