Home › Market News › Grain Futures, Crypto, and AI For Research & Idea Generation
The Economic Calendar:
MONDAY: President’s Day Holiday: U.S. Markets Closed
TUESDAY: Leading Economic Indicators (9:00a CT)
WEDNESDAY: MBA Morgage Applications (6:00a CT), Raphael Bostic Speaks Speaks (7:00a CT), Redbook (7:55a CT), 20-Year Bond Auction (12:00p CT), Michelle Bowman Speaks (12:00p CT), FOMC Minutes (1:00p CT)
THURSDAY: Jobless Claims (7:30a CST), Chicago Fed National Activity Index (7:30a CT), PMI (8:45a CT), Existing Home Sales (9:00a CT), Philip Jefferson Speaks (9:00a CT), EIA Petroleum Status Report (9:30a CT), EIA Natural Gas Report (10:00a CT), 30-Year TIPS Auction (12:00p CT), Patrick Harker Speaks (2:15a CT), Lisa Cook Speaks (4:00p CT), Neel Kashkari Speaks (4:00p CT), Christopher Waller Speaks (9:00a CT)
FRIDAY: Baker Hughes Rig Count (12:00p CST)
Key Events:
The S&P 500 futures finished the week lower -0.34%, after two hotter-than-expected inflation readings. The Nasdaq-100 futures closed the week down -1.48%.
The higher inflation data prints have investors rethinking the timing and extent of the interest rate cuts that the central bank has penciled in for this year.
Higher interest rates hit small-cap stocks the most. Despite that, the Russell 2000 traded +1.16% higher last week.
75% of S&P 500 companies have beaten EPS estimates for Q4, below the 5-year average of 77%, but above the 10-year average of 74%.
The recent January CPI report is a stark reminder that the United States’ inflationary challenges may persist despite previous resolution expectations.
U.S. CPI came in higher than expected. The January Year-Over-Year Consumer Price Index reading printed at 3.1% vs an estimated 2.9%.
The market now sees no chance for a rate hike in March, with Fed swaps shifting the highest probability of a rate cut to June. See probabilities below.
Leading up to the December 2023 meeting, the prevailing sentiment among most Federal Open Market Committee (FOMC) members was a steadfast commitment to prolonged high interest rates to drive inflation back to its 2% target rate, even if it meant risking economic recession. The prioritization of taming inflation outweighed concerns about short-term growth setbacks.
Federal Reserve Chairman Jerome Powell expressed confidence that reducing inflation from its current level of 4% to the target rate of 2% would not pose a significantly greater challenge than the preceding drop from 6% to 4%.
Wow, the narrative changed fast after higher-than-expected CPI (inflation) data.
Former Treasury Secretary Lawrence Summers sees “Meaningful Chance That Next Fed Move Will Be a Hike.”
Both corn and soybean futures touched fresh three-year lows last week.
According to Food Business News, “grain futures dropped Thursday after the U.S. Department of Agriculture forecasted larger crop inventories for the 2024-25 marketing year amid waning global demand for U.S. supplies.”
The WASDE report in May should provide a better assessment when information on spring plantings and survey-based estimates of farmers’ planting intentions are available.
A factor being watched by traders and providing some support for corn is talks of farmers applying fertilizer early in response to abnormal temperatures thawing out fields. Dry soils and seasonally warm temperatures have triggered light fieldwork.
The news and narrative are positive for crypto markets. So far in 2024, Bitcoin prices are up +24% and Ethereum is up +22%.
Coinbase (COIN), the largest U.S. crypto exchange, outperformed analysts’ Q4 earnings and revenue expectations.
Key Takeaways:
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