skip to main content
Market News Posted by John Doherty September 4, 2023

Grain Prices, the VIX Drop, and This Weeks Economic Calendar

Trading Screen

Top things to watch this week

The Economic Calendar:

MONDAY: US Holiday: Labor Day (NYSE Closed)

TUESDAY: Motor Vehicle Sales, Factory Orders, 3-Month Bill Auction, 6-Month Bill Auction, 52-Week Bill Auction, Investor Movement Index

WEDNESDAY: MBA Mortgage Applications, International Trade in Goods and Services, Susan Collins Speaks, PMI Composite, ISM Services Index, 4-Month Bill Auction, Beige Book

THURSDAY: Jobless Claims, Productivity and Costs, Quarterly Services Survey, EIA Natural Gas Report, EIA Petroleum Status Report, 4-Week Bill Auction, 8-Week Bill Auction, John Williams Speaks, Raphael Bostic Speaks, Fed Balance Sheet

FRIDAY: Wholesale Inventories, Baker Hughes Rig Count, Consumer Credit

Key Events:

  • Holiday-shortened trading week. 
  • Oil market reaction after Russia’s new OPEC+ supply cut agreement.
  • Economic releases on factory orders, initial jobless claims, and consumer credit. 
  • FOMC speakers this week – Williams, Bowman, Barr
  • Fed’s Beige Book for September is scheduled to be released.
  • VIX index trading at the lower end of range around 13.
  • UAW looming strike and economic impact.
  • A 7% probability of a Fed interest rate increase of 25 basis points at the next Fed meeting scheduled for September 19-20.
  • IPOs are back, and three tech initial public offerings are on tap in the coming weeks. Instacart, Klaviyo, and chip designer Arm Holdings.


After a solid first half, many traders believe global markets will likely fall into a range trade, delivering very modest returns amidst elevated volatility. However, the market keeps chugging along and trading in the upper end of the trading range for the year.

The strong sectors in August were Energy +5.6% and Technology +1.13%. The weak sectors were Utilities -5.45%, Consumer Staples -4.59%, and Real Estate -2.27%.

Smart beta in August saw continued positive returns in Momentum +1.87%, High Volatility +1.4%, and Growth +1.31%. Unprofitable Stocks struggled in August -6.58%.


It’s the highest close in crude oil futures in a long time. We finally traded above the tight trading range, and the golden cross is in place (the 50-day moving average has crossed the 200-day). Things could get interesting.

Look out for details this week being released as Russia agreed with the Organization of Oil Exporting Countries and their Allies (OPEC+) on a further reduction in the supply of Russian oil to international markets.

One way traders play a possible “quick” break out of the range (or hedge shorts) is via USO call spreads in September. The 76/80 call spreads offer around 5x max payout. Traders could set up the same trade using CL options.

Light Crude Oil Futures Chart 09-04-2023

Source: TradingView


Volatility Index futures are getting cheap, and the market is complacent again.

The VIX went from 13ish to 18 during the initial August sell-off, then back down again. There seems to be a “natural floor” level around 13.

Traders looking for early autumn or fall hedges have ample opportunity—some traders and volume in the VIX October 16/20 call spread scenario—Max payout around 4.5x.

VIX Chart 09-04-2023

Source: Bloomberg


The next Fed meeting is scheduled for September 19-20.

Last week, economic data pointed towards a slowing economy, and traders boosted bets that the Fed could pause on further rate hikes. This data will be instrumental in shaping their decision on monetary policy in its upcoming meeting.

The CME FedWatch tool indicates a 7% probability of an interest rate increase of 25 points at the next Fed meeting scheduled for September 19-20. Fed funds contract implies a probability of 35% of an interest rate hike of either 25 basis points at the November meeting.

Target Rate Probabilities 09-04-2023

Source: CME Fedwatch


With the United Auto Workers threatening a strike and the possibility of a government shutdown, the risk of negative payrolls looms for the coming months.

A strike against any auto companies, especially a lengthy stoppage, could send an economic shiver through several Midwestern states and crimp the profits of General Motors, Ford Motor, and many auto suppliers. 

Hiring has steadily decelerated throughout the year, with June and July figures reverting to pre-pandemic levels.


The recent emergence of an El Niño weather pattern has added to the supply-side risk facing agricultural prices.

According to NOAA, El Niño is anticipated to continue through the Northern Hemisphere winter with greater than a 95% chance through December 2023-February 2024.

The weather is a crucial factor impacting grain prices and can have short and longer-term implications for agricultural supplies. As the combination of temperature and precipitation is a significant driver of grain crop productivity, more frequent extreme rainfalls, heat waves, flooding, and drought tend to make grain production and, hence, grain prices more volatile.

Over the past few months, we recorded the hottest month on record in July 2023, and for the fourth consecutive month, the global ocean surface temperature hit a record high.

El Nino Climate Impacts 09-04-2023


This performance chart tracks the daily, weekly, monthly, and yearly changes of various asset classes, including some of the most popular and liquid markets available to traders.

Asset Class Performance Summary 09-04-2023

All content published and distributed by Topstep LLC and its affiliates (collectively, the “Company”) should be treated as general information only. None of the information provided by the Company or contained herein is intended as (a) investment advice, (b) an offer or solicitation of an offer to buy or sell, or (c) a recommendation, endorsement, or sponsorship of any security, Company, or fund. Testimonials appearing on the Company’s websites may not be representative of other clients or customers and is not a guarantee of future performance or success. Use of the information contained on the Company’s websites is at your own risk and the Company, and its partners, representatives, agents, employees, and contractors assume no responsibility or liability for any use or misuse of such information.
Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the investor’s initial investment. Only risk capital—money that can be lost without jeopardizing one’s financial security or lifestyle—should be used for trading, and only those individuals with sufficient risk capital should consider trading. Nothing contained herein is a solicitation or an offer to buy or sell futures, options, or forex. Past performance is not necessarily indicative of future results.
CFTC Rule 4.41 – Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, because the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs, in general, are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.