Perspective: Mid-Day Commentary for April 3

By: Arlan Suderman, Chief Commodities Economist

Fri, 04 Apr 2025, 16:30

Perspective: Mid-Day Commentary

Arlan Suderman

Chief Commodities Economist

April 4 - Stocks plummeted for the second day in a row after China added another 34% to its tariffs that it already charges the United States. That created more fear on Wall Street that we would see an escalating trade war with China. Fear is the driver currently, with cooler heads still on the sideline. The VIX traded as high as 45.6 on the China announcement, while it is currently trading near 40. My observation over the decades is that it is difficult for any asset to sustain a rally when the VIX is above 30 unless that asset has a strong story of its own. Note from the graphic below that sustained moves above 50 are quite rare, with the most notable examples being the Great Recession of 2008, the pandemic of 2020, and then the Yen/dollar carry trade unwind last August.

As such, my primary focus currently is on the VIX. Keep in mind that Algo computers put on order that chase momentum, magnifying the moves in both bull and bear markets. That then amplifies the human emotions of those most impacted by those market moves, keeping the VIX elevated. That's the phase that we're currently in. Emotions are high, and our trading partners love to see the U.S. stock market crash in the short run, although a strong American economy is always best for the world in the long run. But in the short run, countries like China hope that the lower stock market will put political pressure on President Trump to back down from his tariff plan, and you may or may not be part of that desire as well. Certainly, there are many people who liked the status quo that continued to support new highs in the market, although the mounting debt necessary to sustain that was unsustainable. Meanwhile, the aforementioned fear plays into the hands of our major trading partners such as China. The Dow Jones Industrial Average broke 18.6% on tariff fears in late 2018, before rebounding to new highs by February. That's not a forecast of what to expect this time, as the dynamics are much different. But my point is that the U.S. economy has weathered many storms over the years - each time coming back stronger.

Treasury yields fell to fresh six-month lows this morning as fear continued to drive investors to the relative safety of government securities. Fed fund futures are pricing in 100 basis points of cuts by the end of the year, with the first of those to come in June. That could all change with the next headline, but that's what the market is currently expecting, based on the fear that the tariffs will drive us into recession. The Fed may or may not agree with that assessment. For now, it seems to want to take a "wait and see" attitude. Yet, the lower Treasury yields also work to stimulate the economy. Consumers of commodities are being given a gift with this liquidation. The only question is one of timing. Low prices are the best cure for low prices. The corn market currently looks to be the first of the major commodities to see that dynamic play out, with prices trading positive at times once again today, similar to Thursday. More commodities will likely follow, but first we need to see the VIX drop back below 30, reflecting easing fear levels.

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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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Matt ZellerWed, 05 Aug 2026, 12:39

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Perspective: Mid-Day Commentary for August 4

August 4 – The Dow Jones is absolutely piling on gains today, adding a similar number that led to yesterday’s record, with the benchmark index now nearing the 54k-point mark through mid-morning. The S&P also hit a new record, while the NASDAQ is exceeding both those gains on a percentage basis. The marketplace is optimistic on a U.S.-Iran trade deal, though the proposed resolution is still being “circulated between the parties”.

Mike CastleTue, 04 Aug 2026, 14:58

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