Perspective: Morning Commentary for January 18

By: Arlan Suderman, Chief Commodities Economist

Tue, 18 Jan 2022, 14:28

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

January 18 – Stocks are under pressure this morning, following a disappointing profit miss from Goldman Sachs this morning, and as yields on Treasuries soar. The VIX is trading near 22 this morning, reflecting slowly rising concerns on Wall Street. The dollar index firmed to trade near 95.5 as yields on 10-year Treasuries pushed to fresh one-year highs above 1.85%. Crude oil prices surged to fresh seven-year highs as global supplies tight, after Yemen’s Houthi group attacked the UAE, and threatened more attacks on oil facilities. The Ags are mixed, with corn and soybeans under pressure following good rains in Argentina and wheat prices rebounding higher.

China has a problem. It wants things to be perfect for hosting the winter Olympics next month, and Omicron is messing with its plans. Beijing identified its first case of Omicron on Saturday, leading authorities to immediately implement their isolation plans. The individual had not left the city this month, making the origin of the virus a bit of a mystery. The strain of virus in this individual was different from other cases previously found within China – more consistent with what has been seen in North America and in Singapore, raising speculation that it had a different origin than the other cases.

The office building where the Omicron individual worked was reportedly locked down, and nobody was allowed to leave until they had been tested. The individual had visited numerous malls and restaurants over the past two weeks. As of Sunday midday, a total of 13K people had been tested in the Haidian district where the patient lives, while a nearby shopping mall had been completely disinfected, with all employees tested. However, Omicron must respond differently within China, because no other cases have yet been found, despite the fact that the individual moved about extensively just prior to testing positive. We can be assured that authorities will broaden the testing protocol and restrictions if more cases are identified.

So, what was the source of the Omicron? Chinese authorities are currently focused on the mail. Their current working theory is that the virus is traveling to China via international express mail coming from North America. Expect mail to come under increased scrutiny and disinfection procedures in the coming days as China tries to get Omicron under control. Omicron has been discovered in nine cities within China thus far in six provincial regions since the port city of Tianjin reported its first case on January 9^th. This is a problem for Chinese authorities ahead of the annual Lunar New Year holiday at the end of the month. The Spring Festival time lasts for several weeks, marking a time when the Chinese people travel to connect with family and friends. Travel for this year’s Festival period was expected to be twice that seen in 2021 at 1.78 billion travelers. Such travel would no doubt create more challenges for keeping Omicron contained. As such, ticket sales for the Olympics immediately stopped when the Omicron case was discovered within Beijing. Reports indicate that only selected spectators will be invited to attend on supervised trips, according to event organizers.

China’s gross domestic product grew 8.1% in 2021 versus the previous year, but keep in mind that’s 8.1% growth versus the pandemic lockdown year. Growth in the fourth quarter of 2021 was 4.0%, slowing from 4.9% the previous quarter. Retail sales were up 12.5% for the year over the pandemic shutdown year of 2020, but sales fell 1.7% in December as Covid lockdowns increased. Catering services saw a 2.2% decline in December. The People’s Bank of China cut its interest rate on one-year policy loans by 10 basis points to 2.85%, marking its first cut since April 2020. The central bank also cut rates on the seven-day reverse repurchase rate, and it injected 200 billion yuan of medium-term cash into the economy. These are all signs that authorities are concerned about China’s economy. Meanwhile, other data released this week indicates that China’s population growth has stopped, and it will now decline in the years ahead if things do not change.

A massive volcano eruption covered Tonga with ash over the weekend, raising speculation on social media that it would dramatically cool the earth’s atmosphere, as did Pinatubo several decades ago. However, satellite measurements indicate that we didn’t see nearly enough deposits into the atmosphere to have that kind of impact. Instead, corn and soybean prices are notably lower this morning following soaking rains in previously dry areas of Argentina over the weekend, with a couple of more days of rains expected. The broader pattern is expected to revert back to dry in the weeks ahead, but these rains will make a difference near-term.

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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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