Perspective: Morning Commentary for October 14

By: Arlan Suderman, Chief Commodities Economist

Thu, 14 Oct 2021, 13:30

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

October 14 – Stocks rallied overnight ahead of this morning’s inflation data and earnings reports, with longer-term optimism overshadowing stagnation concerns. That data did little to slow the buying. Bank earnings have been strong thus far, providing fuel for the buying. The VIX is trading near 17.5 – its lowest level in a month. The dollar index is trading near 93.9, after falling to 10-day lows. Yields on 10-year Treasuries are trading near 1.53%. Crude oil prices are roughly 1% higher, while the Ags traded mostly higher overnight as well.

First-time claims for unemployment benefits totaled a new post-pandemic low 293K in the week ending October 9^th, down from 329K the previous week and down from analyst expectations of 320K. This drops the four-week moving average to 334.25K claims, down from 344.75K the previous week. The largest increase in claims last week was in Pennsylvania (+1,707), while the largest decreases were in California (-14,733), District of Columbia (-3,905), Michigan (-3,370), Missouri (-2,598), and Texas (-2,376). Continuing claims of those who report that they are still unable to find a job in the week ending October 2^nd fell 134K to 2.593 million, which is the lowest for this number since March 14, 2020, when it was at 1.770 million. The latest JOLTS report showed that posted job openings finally fell back below 10 million as more people returned to work.

Inflation at the wholesale level remains hot, albeit slightly below levels expected in today’s report. The producer price index increased 0.5% month-on-month in September, matching analyst expectations, but down from 0.7% growth in August. The PPI rose an outstanding 8.6% year-on-year in September, below expectations of 8.7%, but up from 8.3% the previous month. The core PPI that excludes the more volatile food and energy sectors rose 0.2% month-on-month in September, down from expectations of 0.5% and down from 0.6% the previous month. The core PPI was up 6.8% year-on-year in September, below analyst expectations of 7.1%, but up from the 6.7% posted the previous month. Many policymakers will no doubt focus on the lower month-on-month core PPI inflation total, suggesting that this indicates that inflation pressures will soon be in our rear-view mirror. But the continued rise in energy prices impacts nearly every sector of the economy, continuing to keep inflation pressures on the consumer. We get retail sales data for September tomorrow morning.

The consumer will no-doubt feel the pinch of the headline number above showing inflation of 8.6% year-on-year at the wholesale level. That’s inflation that has yet to hit the consumer. Other data out today showed that China’s PPI hit 10.7% year-on-year in September. That is inflation that will be exported to Europe and to the United States in the months ahead. China Direct, from our Shanghai office, notes that China tracks 46 items in calculating its PPI, with 45 of them posting gains last month, with 15 of the posting double-digit inflation gains. China’s consumer price index was only up 0.7% year-on-year, largely due to a 46.9% decline in pork prices. Recent power outages slowed production of goods in China being made to export to Europe and to the United States. Production is starting to ramp up again after the government gave permission to pass along costs of record high coal prices to the consumers of the generated electricity. That again means higher prices for those items being ordered for your Christmas list to hopefully make it here in the next 60 days, which is also questionable considering supply line disruptions that have freight costs at record high levels as well. Inflation is not going away in the next month or two.

China successfully squashed the latest Covid-19 outbreak again with its series of quarantines, but at a price. People are increasingly wary of traveling or going out to eat, knowing that they could pass someone on the street who tests positive two days later, resulting in notification of the need to quarantine. Chinese passenger air traffic was down 24.7% year-on-year in September, even as vaccination rates rise. China is effectively managing Covid, but at a price. That price is starting to take a toll on its economy. The seven-day moving average for U.S. Covid positive tests fell to 86,181 on Tuesday, it’s lowest level since July. The seven-day moving average for Covid-related deaths fell to 1,252, which is a new seven-week low. Covid-related hospitalizations are also the lowest since July. Americans are learning to live with Covid. The Centers for Disease Control reports that 68% of American adults are fully vaccinated, while that number rises to 84% of those 65 years of age and older. In fact, 95% of those 65 years and older have had at least one shot of the vaccine. Our economy is solid, while inflation is a problem due in part to strong consumer demand. Strong demand contributes to supply chain congestion and labor shortages, which also contributes to wage inflation. The question now is, is it time to ratchet down the stimulus, or to increase it?

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Perspective: Morning Commentary for August 11

August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.

Arlan SudermanTue, 11 Aug 2026, 13:21

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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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