Perspective: Morning Commentary for December 6

By: Arlan Suderman, Chief Commodities Economist

Mon, 06 Dec 2021, 14:15

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

December 6 – Fears eased, and stock futures firmed overnight on easing concerns over the Omicron variant of Covid-19. That allowed the VIX to slip back below 30 this morning, after spiking to a 10-month high above 35 on Friday. The dollar index firmed to traded above 96.2, while yields on 10-year Treasuries bounced to trade near 1.38%, after falling to a 10-week low below 1.34% on Friday as money flowed into safe-haven assets. Crude oil prices are bouncing 3% higher this morning on the easing Covid concerns amid talk of reconsidering restrictions, while the Ags remain under pressure in early trade.

The Omicron variant of Covid-19 continues to be the focus on Wall Street, as traders assess the potential risks from this new strain of the coronavirus. There’s a lot that we still do not know about Omicron, which has more than twice the number of mutations as the Delta variant, with most of those mutations said to be found in the spike, or the crown-like protein on the surface of the virus that vaccines train our bodies to attack. It is expected to take scientists many more weeks to learn what they need to regarding how contagious it is, and the short- and long-term implications for those who get it. The early indications would seem to indicate that these mutations improve the virus’ ability to evade our first line of defense via vaccine or natural antibodies, but not our second line of defense found in the T-cells. Its symptoms appear to be very similar to the Delta variant, or possibly even less severe.

Let me remind you that I am not a doctor, so this is merely an overview of what I read, and it should be taken for what it’s worth, checking it out yourself. Nonetheless, the bottom line is that I have yet to hear of any deaths in the weeks that this virus has been around, with cases thus far generally being mild or asymptomatic. As such, many of the initial restrictions implemented when reports of the variant emerged are being reconsidered, which is easing fears on Wall Street somewhat. Even so, the markets remain vulnerable to liquidation on the next headline that may emerge until we learn all that needs to be learned about Omicron. I anticipate that the markets will eventually get desensitized to reports of new variants, and focus more on the fundamentals, but we are not there yet.

China’s economy is struggling to sustain growth. It grew just 0.2% quarter-on-quarter in the third quarter, after growing at a 1.2% pace in the second quarter. Monthly data emerging from China suggests that the sluggish third quarter growth has carried over to the fourth quarter as well. China’s zero-tolerance policy toward covid is partially responsible for the sluggish growth, with people reluctant to travel or go out to eat if it increases the risks that they may be notified that they unknowingly had contact with someone on the street or elsewhere who tested positive a day or two later, requiring them to go into quarantine. However, other factors are at play as well. Weakness in the property sector continues to weigh on the economy, as have recent measures implemented to curb energy consumption. The People’s Bank of China, its equivalent to our Federal Reserve, announced today that it will cut the reserve requirement ratio for most domestic financial institutions by 50 basis points effective December 15, dropping it to 8.4%. This move is expected to pump another CNY1.2 trillion yuan of longer-term liquidity into China’s economy to stimulate growth. It makes more money available for banks to lend, which they are being “encouraged” to target to small and medium-sized businesses. The PBOC suggests that today’s move is a “regular monetary policy action,” but it is moving in the opposite direction of many other central banks that are tapering stimulus.

China reported 61 new cases of Covid-19 yesterday, with 38 of those originating domestically. Twenty-eight of the cases were again in Inner Mongolia, while seven were in Harbin City, two cases in Yunnan, and one case in Hebei. Harbin, which is one of the largest cities in Northeast China, suspended dine-in services in all restaurants, along with catering services, starting on December 4^th. Only self-pick-up and take-out meals are being allowed. Furthermore, all commercial stores, except supermarkets, pharmacies, power supply facilities, communications centers, banks, etc. are temporarily closed to stop the spread of the latest outbreak. However, these restrictions also contribute to the weak economic outlook addressed above as these outbreaks continue to pop-up.

December tends to be a tough time for the Ag commodities, amid a vacuum of fundamental news to drive prices. Yet, little has changed in their overall fundamentals, which will again be the focus in Thursday’s USDA WASDE crop report. High crop input prices, that most impacts corn production, along with lingering tight supplies of quality milling wheat, provide support, with end users buying the price breaks in a continued backdrop of high inflation.

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Perspective: Morning Commentary for August 7

August 7 – The U.S. economy unexpectedly lost 23k jobs in July, dramatically below market expectations of an 80k increase and marking the worst Non-Farm Payrolls print since February. Furthermore, May and June were both revised sharply downward, with combined revisions showing 103k fewer jobs than previously reported. Outside of the healthcare sector, which added 22k jobs in July, the losses were very broad-based. Government payrolls saw the largest decline, shedding 53k jobs in July, the largest seen since October 2025, while June was revised down to show a loss of 10k jobs as well. The private sector at least saw growth, adding 30k jobs in July, now matching the month prior after it was revised down from the 49k initially reported, and substantially missing forecasts of 78k jobs being added. This is a sharp reversal in course from the largely better than expected U.S. labor data seen earlier this week.

Mike CastleFri, 07 Aug 2026, 13:26

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Perspective: Mid-Day Commentary for August 6

August 6 – Stocks remain quietly mixed at midday as both the S&P 500 and Dow Jones remain just below their fresh all-time highs put in yesterday. This is allowing the VIX to cool to a four-week low below the 15.4 mark, reflecting the collective sigh of relief in the market amid largely better than expected U.S. economic data today. The dollar remains quietly in the green in its relatively tight range this week, trading at 99.9 at the time of writing. Treasuries remain elevated but have cooled from their recent peaks, with 30-year yields trading at 5.189%, 10-year yields trading at 4.647%, and 2-year yields trading at 4.229% at midday. Crude oil also remains quietly in the green, with nearby WTI up 2.3% on the day trading near $76.80 and nearby Brent up 2.4% on the day trading near $81.40. The ags remain mixed, with the wheat complex now squarely in the red while corn and soybeans cling to small gains, and the livestock complex largely pushes lower.

Mike CastleThu, 06 Aug 2026, 15:18

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Perspective: Morning Commentary for August 6

August 6 – This morning’s stronger-than-expected U.S. labor data offered markets some relief, reinforcing confidence in the economy while giving the Fed greater flexibility to raise rates should inflationary pressures reaccelerate in next week’s July data. Stock futures are pointing to a mixed open to start the day, with the tech-heavy Nasdaq showing the most weakness. The VIX has fallen notably from yesterday’s spike above 18.4 as it starts the day hovering just below the 16-mark. The dollar is quietly higher as it trades just above 99.8, holding in the tight range seen thus far this week as traders continue to digest data to shape expectations for the Fed’s next move, which we’ll dive into in more depth below. Long-term treasury yields have relaxed slightly from their recent spike, with 30-year yields starting the day trading just above 5.19%, while 10-year yields trade above 4.64%, and 2-year yields sit below 4.22%. Crude oil is modestly higher to start the session after sharp declines earlier in the week, with nearby WTI up 1.8% to trade at $76.40 and nearby Brent up 2.4% to trade at $81.40. Meanwhile, the ags are quietly mixed to start the day.

Mike CastleThu, 06 Aug 2026, 13:24

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