Perspective: Morning Commentary for April 17

By: Arlan Suderman, Chief Commodities Economist

Mon, 17 Apr 2023, 13:41

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 17 – Stocks have a mixed to firmer tone to start the week, with traders monitoring earnings reports ahead of the Federal Reserve’s next policy meeting in a couple of weeks. The VIX is trading below 18 this morning, and just above Friday’s 10-week lows, reflecting calm across Wall Street. The dollar index is trading near 101.9 in early trading. Yields on 10-year Treasuries are trading near 3.56%, representing their highest level thus far this month, while yields on 2-year Treasuries are trading near 4.15%. Yet, generally favorable earnings reports continue to support stocks. Crude oil prices are modestly weaker after failing to push through the 200-moving average late last week, while the grain and oilseed markets were mixed to higher overnight.

The Empire State manufacturing index rose to 10.8 this month, up dramatically from a -24.6 in March and above analyst expectations of -18.3. A positive number reflects month-on-month growth, while a negative number represents contraction in the industry. In other words, analysts expected more contraction this month, but instead saw growth in New York state’s manufacturing sector. Both new orders and shipments surged this month within the New York Fed district, although delivery times held steady, and inventories moved higher. However, both employment and hours worked declined for the third consecutive month. Input price increases moderated, while selling prices continued higher at the previous month’s pace. Surveyed businesses saw little improvement in overall conditions in the next six months, despite this month’s better numbers. The New York Fed’s report is always the first each month for the manufacturing sector, so traders will be watching to see if this sets a better trend for the sector, or if it is an aberration. For now, it helps to ease concerns on Wall Street.

Fed Fund futures trading puts 84% odds this morning of another 25-basis point rate hike by the central bank on May 3^rd, pushing it above 5% and the March headline consumer price index. In fact, Fed Fund futures now are trading expectations that the Fed’s benchmark rate will be 4.5% by December, which means rates peaking just above 5% next month, and then pulling back 50 basis points. The Fed has thus far indicated that there will be no rate cuts this year, but the 50-point expected pullback is less than the 75-100 points in rate cuts expected by the market earlier this year. The market is coming to take the Fed at its word, little by little. And stocks are not suffering as a result, with earnings reports continuing to hold up, relatively speaking. The world hasn’t come to an end. The market is coming to accept things as they are, with generally pretty low fear levels. The VIX is just above more than one-year lows on those easing fear levels.

Tensions remain high in the Taiwan Strait, which the body of water between Taiwan and China. China built a blockade around Taiwan a week ago in protest of its president meeting with House Speaker Kevin McCarthy when she made a stop in California on her way back from a diplomatic trip to Central America. The U.S. Constitution puts the Speaker of the House as the third highest ranking government official in the United States, and China views that as an insult to its sovereignty. China also staged military drills that mocked precision strikes on key targets on the island nation. The U.S. warship USS Milius sailed through the Taiwan Strait on Sunday, just days after China ended its latest round of war games around Taiwan. The U.S. stated that it was a routine transit through the region, but it was likely meant to send a message to China that it is committed to a free Indo-Pacific region. The United States Navy sends warships through the strait roughly once a month, while also regularly moving through areas of the South China Sea that are considered international waters by most, but which China now claims as its waters. The USS Milius sailed near one of the most important Chinese controlled man-made islands in the South China Sea last week to make a statement. It did so at the very point in time when China was blockading Taiwan. Meanwhile, China continues to conduct military activities around Taiwan, although on a reduced scale, with 18 Chinese military aircraft and four naval vessels spotted operating around Taiwan in the latest 24-hour reporting period. The greatest risk to the commodity markets here near-term is an “accidental” war with tensions so high and so much military equipment in the region.

The frost line stretched nearly to the Oklahoma line this morning, with it expected to extend nearly to the Ohio River tomorrow morning. We may see even colder air drop across the Midwest a week from now. Fortunately, development of the wheat crop is delayed, reducing risks for substantial damage to it at this point. Any newly planted corn and/or soybeans that have emerged would also be at risk, although grain traders will assume that those acres will simply be replanted this early in the season. The Ukraine grain initiative remains at risk. Meanwhile, Brazil’s corn crop continues to get bigger as Argentina’s gets smaller. Friday’s CFTC commitment of traders report revealed that the speculative funds still hold large short positions in Chicago wheat, so we’ll need to watch for anything that might trigger a short-covering rally. My general expectation is continued tight old-crop stocks, with wheat stocks staying tight in the year ahead, while corn and soybean supplies start to rebuild.

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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: 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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Perspective: Mid-Day Commentary for August 5

August 5 – The Dow Jones is ripping higher for yet another session, up safely over 500 points at the time of this writing to carve out another record high; the S&P and NASDAQ are a bit less enthusiastic but the former is still making its own record high, while the latter is less than 500 points off its own top thanks to a strong ongoing week of trade. The dollar is churning lower this morning in an effort to re-test Monday’s 1 ½-month low, while the ten-year note has flipped higher in the mid-morning hours. The CME FedWatch tool interesting has market odds of a quarter-point rate hike next month coming closer to a 50-50 proposition as crude oil prices decline.

Mike CastleWed, 05 Aug 2026, 15:19

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