Perspective: Morning Commentary for December 20

By: Arlan Suderman, Chief Commodities Economist

Tue, 20 Dec 2022, 14:30

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

December 20 – Stock futures were quietly mixed this morning as Wall Street drifts into the holidays and into the end of the calendar year with fears of recession creating a cloud that casts a shadow over the market. Yet, the VIX continues to hover above 22 this morning, reflecting concerns on Wall Street, but no real panic by any means. The dollar index traded lower near 104.3 in active trading, even as Treasury yields pop this morning. Yields on 10-year Treasuries are trading at nearly three-week highs near 3.70%, while yields on 2-year Treasuries are trading near 4.31%. Crude oil prices are modestly higher in relatively quiet trade, while the grain and oilseed markets traded mixed to firmer overnight.

Housing starts came in at an annualized rate of 1.427 million units in November, down slightly from 1.434 million in October, but up from analyst expectations of 1.400 million. Permits for new housing starts provide an indication of future demand. They fell to an annualized rate of 1.342 million in November, down from 1.512 million the previous month, and well-below analyst expectations of 1.495 million. The housing sector of our economy remains in a recession, even if the overall economy is not. Today’s mortgage rates are a shock to younger consumers who were not around for the double-digit rates of the 1980s. They’ll eventually adjust to the higher rates, but they’ll first have to see less uncertainty regarding the economy, and that uncertainty is likely to be with us for a while longer. We’ll get consumer confidence data on Wednesday morning, with durable goods orders data and personal income and expenditure data on Friday to close out the week ahead of the Christmas break.

Congress is again running out of time to keep the government funded. Negotiators revealed a $1.7 trillion package overnight that would fund the government through the end of the fiscal year on September 30^th. That’s more than a 13% increase in spending over the previous year, working against efforts of the Federal Reserve to reign in inflation, but that’s true in just about every developed country in the world currently. This package now has to make it through both the House of Representatives and the Senate, where it is sure to face amendments that will also have to be worked out between the two houses. Congress has until Friday to put a bill on President Biden’s desk to keep the government funded. Wall Street doesn’t really seem to care, because it knows that for better or for worse, Congress usually finds a way to pass something at the last minute to fund the government, although traders will be watching, just in case the negotiations fall apart.

China’s markets slipped into a “risk-off” mode today amid the uncertainty of the impact of the rapidly spreading Covid-19 virus. The virus continues to surge through the population at a rapid pace, suggesting that all 1.4 billion people in the country could have it in one form or another over the coming four to six weeks. World healthcare workers worry about the mutations that we might see in the virus amid such a rapid spread through so many people in such a short period of time. That’s why some experts predict three waves of the virus through the population. The official death toll remains extremely low, causing people to question the numbers, especially amid western media reports of observing lines of hearses at a designated Covid crematorium. Yet, we thus far are not hearing stories of mass fatalities from our “boots on the ground.” The primary concern still rests with the impact of the virus when it reaches the 500 million primarily elderly in rural areas of the country with poor healthcare. The other question revolves around the phase of the virus spread during the annual Lunar New Year holiday in late January, which is the most active traveling time of the year for China. We can anticipate a robust economic recovery at some point on the other side of this virus outbreak. The question is, how bad do things need to get before that happens, and what will the timing of that recovery be in the year ahead? I’m better on sooner rather than later, but nobody really knows.

Chinese soybean buying slowed last week to just 10 cargoes, including four for January shipment, four for February, and two for March shipment. Buyers purchased three of those January cargoes from Brazil, anticipating the timely availability of new-crop supplies, with the remaining January cargo coming from the United States. Observers believe that Brazil will have at least 1 million metric tons of new-crop soybeans available for shipment in January, phasing out the need for U.S. supplies. Roughly another 10 cargoes must be purchased for January shipment to provide coverage of China’s needs, with Brazilian new-crop supplies currently priced very competitively versus U.S. supplies. As such, U.S. soybean export sales are expected to tail off in the weeks ahead, along with shipments, removing a point of support for the oilseed in the markets.

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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