Perspective: Morning Commentary for November 3

By: Arlan Suderman, Chief Commodities Economist

Thu, 03 Nov 2022, 13:23

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

November 3 – Stocks are under pressure again today, as Wall Street adjusts to new hawkish statements from the Federal Reserve on Wednesday afternoon, while also monitoring growing geopolitical risks that include China, Russia, and North Korea. Yet, the VIX continues to trade primarily between 26 and 27 this morning, reflecting elevated fear levels, but no sense of panic on Wall Street. However, the broader commodity sector feels strong headwinds this morning from a surging dollar following yesterday afternoon’s statement from the Fed, with the dollar index sharply higher at 113.0 this morning. Yields on 10-year Treasuries are trading near 4.22% this morning, while yields on 2-year Treasuries are trading near 4.75%, representing fresh 15-year highs. Crude oil prices are 1% lower, while the grain and oilseed markets are generally 1% to 2% lower as well.

First time claims for unemployment benefits slipped to 217K in the week ending October 29, down from 218K the previous week. That dropped the four-week moving average to 218.75K, down from 219.25K the previous week, suggesting that the jobs sector remains tight. However, continuing claims for the week ending October 22 rose another 47K to 1.485 million. This number has been slowly trending higher in recent week, and it is one that we need to watch for signs that stress in the labor sector is beginning to ease, allowing wage inflation to slow. Unit labor costs rose at an annualized 3.5% rate in the third quarter, slightly less than the 4.0% expected and down from 8.9% gains the previous quarter. That’s largely because productivity rose slightly at an annualized 0.3% in the quarter as people returned to work. That’s less than the 0.5% gains expected, but certainly better than the 4.1% decline in productivity seen in the second quarter. This too should start to ease wage inflation a bit.

The Dow Jones Industrial Average traded a 932-point range after the Federal Reserve released its updated monetary policy statement at 2 p.m. EDT on Wednesday. The markets initially shot higher on the statement’s release, thinking that the statement provided a path for the Fed to pivot its monetary policy away from its current hawkish stance. However, the trend turned clearly lower as Fed Chair Jerome Powell answered questions at his press conference following the statement’s release. The statement indicates that the Fed is prepared to slow the pace of rate hikes when appropriate – perhaps as early as the December meeting. However, the emphasis of Powell’s statements at the press conference was clearly on the fact that, “we have some ways to go” in taming inflation, with the ultimate interest rate perhaps higher than previously expected. In fact, he stated that the height of the ultimate rate is likely more important than the pace of the increase, and that positive real rates will be necessary to tame inflation. We’re still some ways away from that. Powell also stated that “the labor market continues to be out of balance, with demand substantially exceeding the supply of available workers.

Inflation occurs when demand exceeds supply. Trillions of dollars of stimulus fed demand following the start of the pandemic, with the bulk of that still in the system. Monetary policy is able to lower inflation by reducing demand. Higher interest rates and the withdrawal of stimulus via shrinking the Fed’s balance sheet reduces the amount of money that can be spent. This is something that I’ve frequently focused on over the past year plus. However, inflation can also be reduced by increasing the supply to bring it in line with demand. That’s easier for some sectors than it is for others. For example, wage inflation can be fixed by increasing the number of workers, but that takes fiscal policy changes by Congress. The energy supply can also be increased, but that too needs action by Congress. Similar actions to reduce regulations that restrict output can be taken by Congress to increase the supply of goods and services. But the Federal Reserve has no control over that, and Congress has shown little interest in doing its part. That may change with the next election, but neither party has shown much leadership regarding necessary policy changes needed to increase the supply of goods and services. Until then, it comes down to the Federal Reserve doing what it can, which means focusing on higher interest rates and withdrawing money – slowing the economy while raising the unemployment rate – to reduce demand as it tries to tame inflation by itself. One thing was clear though on Wednesday – Powell is not ready to talk about a pause in monetary tightening yet.

Grain and oilseed prices have largely erased early week risk premium tied to the pause in export shipments from Ukraine. They face added headwinds today of a strong dollar as currency traders price in expectations that the Fed will continue to lead the world toward higher interest rates. StoneX’s customer survey yield of 174.5 bushels per acre for corn does little to change that sentiment, although its soybean yield did slip lower to 50.9 bpa. Other private estimates will be coming out in the days ahead, with USDA weighing in on the question next week on November 9. Argentina largely remains dry, with Brazil trending that way, but timely rains continue to keep the bulk of Brazil’s corn and soybean crops in pretty good condition, leaving little fodder for now for the bulls to flip current momentum.

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Perspective: Morning Commentary for August 10

August 10 – The world commodity markets and economy remains at risk amid two wars this morning. Tensions continue to escalate in both the Middle East and the Black Sea – risking pulling other countries into the conflicts. Stocks are down modestly this morning as we start a week of trade in which we’ll see key inflation and retail sales data following a weak jobs report this past Friday. Yet, stocks continue to trade just below record high levels, with the VIX trading near 2026 lows just above 15. The dollar index is trading near 99.7. Yields on 10-year Treasuries are trading near 4.68%, while yields on 2-year Treasuries are trading near 4.23%. The energy and food-based markets are firmer today amid the escalated risks. WTI crude oil is trading near $80, while Brent trades near $85 per barrel. Double-digit gains in the winter wheat markets lead the way for higher grain and oilseed prices.

Arlan SudermanMon, 10 Aug 2026, 13:51

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Perspective: Mid-Day Commentary for August 7

August 7 – Stocks are looking to end a strong week on a strong note, with the major indexes all in the green at the time of writing. The VIX touched a nearly seven-month low earlier in the session and remains muted as it hovers just below the 15-mark as this morning’s ugly labor market data helps ease hawkish Fed jitters. The dollar has rebounded from its nearly two-month low earlier in the session but remains in the red on the day, trading at 99.55 at the time of writing. Treasuries have had a very volatile day, with yields tanking following this morning’s Non-Farm Payrolls release but bouncing back into midday, with 30-year yields now trading at 5.209%, 10-year yields trading at 4.654%, and 2-year yields trading at 4.204%. Crude oil has risen from the morning lows as traders eye the weekend market closure for potential geopolitical developments, with nearby WTI now down only 0.2% on the day to trade around $78.10 and nearby Brent breaking into the green, up 1.25% on the day to trade above $83.50. The ags are largely mixed, with the grains and oilseeds mostly in the green, save for a mixed picture in the soy complex, while live and feeder cattle futures move in opposite directions, with the former adding to yesterday’s sharp losses and the latter attempting a rebound.

Mike CastleFri, 07 Aug 2026, 17:09

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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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