Perspective: Morning Commentary for December 30

By: Arlan Suderman, Chief Commodities Economist

Thu, 30 Dec 2021, 14:25

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

December 30 – All is calm on Wall Street this morning as traders prepare to ring in the New Year this weekend. Trading is thinner than normal, and complacency has again become common as confidence grows that the economy will survive the Omicron variant of Covid-19, even as massive cancellations continue to hamper travel. Stocks continue to flirt with record territory, with the VIX setting new six-week lows this week below 17. The dollar index is trading near 96.2 this morning, rising on the release of weekly jobless data, while yields on 10-year Treasuries are trading near 1.53%. Crude oil prices are modestly higher on this week’s big run to one-month highs, while the Ags traded mostly lower overnight following the appearance of some showers in dry areas of southern Brazil.

First-time claims for unemployment benefits fell to 198K in the week that ended December 25, down from 206K the previous week and below analyst expectations of 205K. More significantly, continuing claims fell by 140K to 1.716 million, which is the lowest level for those still unable to find work since March 7, 2020, when the number was 1.715 million. This indicates that people are returning to work, suggesting that the economy continues to provide opportunities for those who are willing and able to work. This is a significant post-pandemic milestone for the jobs sector.

Flight cancellations are already stacking up across the country today, and around the world, largely tied to the Omicron variant of Covid-19. FlightAware already reports 1,047 U.S. flight cancellations early this morning, with another 980 delays on the board. Those numbers are expected to go up, as frustrated holiday travelers seek ways to get home. Global cancelations total 2,543, with delays at 5,384. Flight crews continue to call in sick, largely tied to the Omicron variant, with relaxing of the Centers for Disease Control’s quarantine guidelines doing little to ease the problem. This directly reduces energy consumption, but crude oil prices pushed to fresh one-month highs on Wednesday anyway, because traders are convinced that this will all pass quickly as the Omicron variant speeds through the population.

The Centers for Disease Control reported 431,567 positive Covid tests on Tuesday, the latest date for which data was available this morning, which was down only modestly from Monday’s spike record high of 446,072. That brought the seven-day moving average to a record high 277,241 on Tuesday, up from 245,049 the previous day, and above the previous record high set in January of this year at 250,435 positive tests. These numbers do not include the unreported at-home tests. Thus far, the daily death count related to Covid-19 remains relatively stable, and it is currently anticipated that will remain the case due to the milder nature of Omicron relative to Delta and to the other previous variants. China reported another 156 new locally transmitted Covid cases, with all but one of them in Xi’an – the capital city of Shannxi. The city of nearly 13 million people remains in a virtual lockdown, with some residents complaining they are not getting enough food. City officials have embarked on a sixth round of citywide testing. More than 1,100 locally transmitted cases have been identified within Xi’an since December 9^th, making it the worst for any Chinese city this year. Xian is an industrial and tech hub within China, so the impact on the economy will be felt.

China’s resolve to reunify Taiwan is clear. An arm of its state-run media posted a video today of Chinese State Counselor and Foreign Minister Wang Yi. He stated, “On the Taiwan question, let me emphasize the following. There is only one China in the world, and Taiwan is part of China. This is an undeniable historical and legal fact. Though there is political antagonism between the two sides of the Taiwan Strait as a result of the civil war fought many years ago, China’s sovereignty and territorial integrity has never been severed and will not be severed. This is the true status quo of the Taiwan question and also the essence of the 1992 Consensus reflecting the one-China principle, and therefore forms the foundation for pursuing peaceful development of cross-Strait ties. However, the DPP authorities have been bent on undermining this status quo and foundation. They are the ones responsible for current tensions in the Taiwan Strait. The U.S. has gone back on its commitment made when it established diplomatic relations with China, condoned and abetted “Taiwan independence” forces, and tried to distort and hollow out the one-China principle. This will put Taiwan into an extremely precarious situation and bring an unbearable cost to the U.S. itself. The reunification of China is an unstoppable trend. Attempts to seek “Taiwan independence” will inevitably end up in failure. There is no other way out for Taiwan than to reunify with the mainland. This is an inevitable trend of history and the only practical and logical outcome.”

Wang Yi is probably the #2 ranking foreign affairs official within China. China is clearly stating its resolve to reunify Taiwan to the Mainland, while testing the U.S. resolve to stand with Taiwan. It is putting the blame on the United States for putting Taiwan in a precarious position, deflecting any blame that it might have in a conflict intended to reunify Taiwan. The China/Taiwan conflict, along with Russia/Ukraine, are two potential black swan events to be monitored that could significantly impact the markets in 2022 and beyond. At least that risk must be respected.

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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.

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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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