Perspective: Morning Commentary for November 7

By: Arlan Suderman, Chief Commodities Economist

Mon, 07 Nov 2022, 14:24

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

November 7 – Stocks and commodities came under pressure overnight, with traders showing disappointment in weekend reports that China will hold the line on its dynamic-zero Covid policy. However, both have generally firmed through the night to reduce losses, with some actually moving into positive territory this morning. The strength comes as Wall Street looks ahead to tomorrow’s elections and the prospects of a more business-friendly Congress for the next term. In fact, traders largely overlooked data out of China showing a significant slowdown in both exports and imports in October. Nonetheless, the VIX bounced back to trade above 25 this morning, after falling to 24 for the first time in more than seven weeks on Friday. The dollar index continued to slide lower, trading near 110.3 at this hour. Yields on 10-year Treasuries are trading near 4.17%, while yields on 2-year Treasuries are trading near 4.71%. Crude oil prices are trading modestly mixed, while the grain and oilseeds are mixed to lower.

The people of China were disappointed on Saturday when health officials there reiterated adherence to the dynamic-zero Covid policy that has done so much damage to the Chinese economy. U.S. stocks and commodity prices rallied notably to close out trading last week on the expectation that China would reopen its economy in the months ahead. Yet, the official line remains one of holding the line with the current dynamic-zero policy. Meanwhile, Covid numbers continue to rapidly escalate across China, with Guangdong facing its most complex and severe outbreak since the pandemic started three years ago. Total reported Covid-19 cases in China surged to 5,496 on Sunday, including 2,116 in Guangdong, 1,033 in Henan, and 585 new cases in Xinjiang. There are no signs that the current Covid outbreak is anywhere close to being contained, as new variants increasingly spread easier, while being more difficult to contain, even as they generally lose their lethal punch.

Both China’s exports and imports unexpected dropped sharply in October, which is the first time that has happened for both simultaneously since May 2020. The decline puts even more pressure on Chinese authorities to change their dynamic-zero Covid policy, but President Xi Jinping staked his presidency on the policy, and he has removed anyone from the Politburo who might challenge his thinking. The decline in exports is likely due to slowing global demand due to economic challenges, but much of it is also due to supply chain challenges within China that prevent it from shipping products out due to the dynamic-zero Covid policy. For example, Apple says it expects slower shipments of its most-powerful iPhone product this holiday period because of Covid problems at China’s Foxconn factory that I wrote about last week. October exports of Chinese products to the United States declined 12.6% in October, while shipments to Europe dropped 9%.

China published a book titled, Questions and Answers of the 20^th Party Congress Constitution Amendments, that spells out constitutional changes made during the Communist Party Congress last month. The book explicitly states that Beijing can only achieve permanent peace with Taiwan by a complete “reunification” with the mainland. The book was written by party ideologues, led by three current members of the powerful group of seven Politburo Standing Committee. The book focuses with great detail on the significance of “reunifying” Taiwan without going into detail on how it would be accomplished, which provides more evidence that China intends to do so. We just don’t know if it will be this week or later this decade. Either way, it’s not considered to be good for U.S. commodity shipments to China when that time does come.

Two domestic items on the calendar are expected to shape market sentiment this week, while traders continue to monitor chances that the Ukraine trade agreement will be extended beyond November 19. The first is the U.S. mid-term election on Tuesday, which may alter economic policy here in the United States with implications for taming inflation and shifting market focus. The second is Wednesday’s USDA WASDE crop report. The two most likely areas for market-moving adjustments will be in the corn and soybean yields and in exports for both, with a reduction in exports likely due in part to low-water problems on the Mississippi River. Back-to-back weeks with soaking rains over the eastern Plains and portions of the central Midwest have only very modestly improved water levels on the river. Water levels at Memphis improved several feet, but they remain 12 feet below low stage levels. A general trend toward continued improvement is expected, but at a very slow pace. Midwest soils were very dry coming into mid-fall, so it will take an extended period of above-normal precipitation to notably improve river water levels, contributing to the rationing of export demand.

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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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