Perspective: Morning Commentary for October 9

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

October 9 – Stock futures traded mixed to weaker early this morning, with traders anticipating this afternoon’s release of the minutes of the September Federal Open Market Committee meeting. Those minutes are expected to show whether the Fed’s 50 basis point rate cut on the 18^th was an easy decision, or a hard sell by Fed Chair Jerome Powell. Traders are also anticipating key inflation data the next two days, as well as early third quarter earnings reports, while monitoring the landfall of a powerful hurricane off the coast of Florida that will cost our economy billions of dollars. The VIX is trading near 22 this morning, while the dollar index is trading near 102.6. Yields on 10-year Treasuries are trading near 4.03%, while yields on 2-year Treasuries are trading near 3.96%. Crude oil prices remain weak, while the grain and oilseed markets firmed overnight.

Hurricane Milton continues to barrel its way toward Florida this morning. It restrengthened to a Category 5 storm late on Tuesday, although it is expected to weaken as it get closer to landfall late today or early tonight. Even so, it is expected to be a very strong storm, likely of Category 4 strength or stronger, when it strikes land somewhere near Tampa. Millions of people have been told to evacuate ahead of what is one of the strongest hurricanes to ever form in the North Atlantic basin area. A storm surge of up to 12 feet is expected to sweep into an area that is home to several million people. Much of Tampa Bay is little more than 10 feet above sea level. Big waves will be on top of that storm surge. The latest runs have Milton making landfall just south of Tampa, although those forecasts continue to move around. The storm is expected to remain at hurricane strength to varying degrees all the way across Florida, during the day on Thursday, damaging citrus groves, but also potentially doing significant damage to Florida’s phosphate fertilizer industry, depending on its path. Florida accounts for more than 62% of U.S. phosphate fertilizer production, which could lead to significant shortages as we prepare for the 2025 growing season.

Israeli airstrikes killed two possible successors to Hezbollah, according to Israeli Prime Minister Benjamin Netanyahu on Tuesday. The previous leader had been killed days earlier by Israeli strikes. That has Hezbollah speaking of potential ceasefire talks. In fact, it seems to have dropped its demand for Israel to end the war in the Gaza Strip just to stop Israel from striking it. That eased concerns a bit on Wall Street yesterday regarding the potential for the war to broaden in the Middle East, although it may also force Iran’s hand to get more engaged in the war, with its proxy groups currently losing. To this point, Iran’s been able to fight this war through its proxy groups while claiming innocence. It may not be able to maintain that position much longer. Iran hit Israel directly with some 180 missiles on October 1^st, and then warned against retaliation against it. However, Israel has already promised retaliation at the time, and with the method, of its choosing. Based on the centuries long history of this conflict that has roots in Abraham’s family, I doubt that we are seeing the beginning of the end of this conflict, unfortunately. We may see a period of calm for a while, but that would likely be a time of each side regrouping. As such, the risks to energy and fertilizer supplies exported from the region may ebb and flow, but they’re not likely to go away any time soon.

Tensions are again rising in the Taiwan Straits, as leadership in both China and Taiwan exchange words ahead of Taiwan’s National Day on Thursday. Taiwan’s President Lai Ching-te is expected to address the island nation on Thursday, where he is expected to once again speak of Taiwan’s independence, and how it will be impossible for the People’s Republic of China to become Taiwan’s motherland because Taiwan has older roots than does the Mainland China. Lai’s speech on Thursday is meant to mark the anniversary date for when the Republic of China overthrew the Chinese dynasty rule in 1911. However, that republican government fled to Taiwan in 1949 after losing a civil war with Mao Zedong’s communist regime.

The Chinese Communist Party celebrated their 75 years of rule last week. It’s long been their position that they have unfinished business, and that is to once and for all seize control of the Republic of China that is now located on Taiwan. The fact that Taiwan is now home to most of the world’s production of the highest quality microchips provides added incentive for China, but its primary motivation is steeped in cultural history. Chinese authorities are already warning Lai regarding possible comments that he might make that might escalate tensions. It is believed by some that China, based on its previous behavior, will respond with military action around the island as an intimidation factor. Lai’s inauguration in May resulted in China conducting “punishment” war games around the island nation. There’s been little news coverage of the recently escalating tensions in Southeast Aisa due to the focus on the Middle East, but this is another hotbed area where tensions continue to escalate to the point where a spark could ignite a fire at any point that would be expected to be negative for commodity trade with China.

This material should be construed as market commentary and represents the opinions and viewpoints of the author, and does not reflect tailored advice associated with any specific account.

The views are current only through the date stated and are subject to change at any time based upon market or other conditions, and StoneX Group Inc. (“SGI”) disclaims any responsibility to update such views. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. Past performance does not guarantee future results.

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided.

References to certain OTC products or swaps are made on behalf of StoneX Markets, LLC (SXM), a member of the National Futures Association (NFA) and provisionally registered with the U.S. Commodity Futures Trading Commission (CFTC) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ and who have been accepted as customers of SXM.

StoneX Financial Inc. (SFI) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Advisor. References to certain securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to certain exchange-traded futures and options are made on behalf of the FCM Division of SFI. Wealth Management is offered through SA Stone Wealth Management Inc., member FINRA/SIPC, and SA Stone Investment Advisors Inc., an SEC-registered investment advisor, both wholly owned subsidiaries of SGI.

StoneX Financial Ltd (SFL) is registered in England and Wales, company no. 5616586. SFL is authorised and regulated by the Financial Conduct Authority (FCA) (registration number FRN:446717) to provide services to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorised to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorised and regulated by the FCA under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorised by the FCA.

StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism. SAP is an “Approved International Trading Company” authorized to act as a “Spot Commodity Broker” under the Commodity Trading Act.

StoneX Financial Pte Ltd (Co. Reg. No 201130598R) (“SFP”) is regulated by the Monetary Authority of Singapore and is a Capital Markets Service Licensee (for dealing in capital market products), an Exempt Financial Adviser (for advising on investment products and issuing or promulgating analyses/ reports on investment products) and a Major Payment Institution (for cross-border money transfer service).

SFP may distribute analysis/report produced by its respective foreign affiliates within the StoneX Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations Recipients should contact SFP at (65) 6309 1000 for any matters arising from, or in connection with, this webinar.

StoneX Financial (HK) Limited (CE)No.: BCQ152) (“SHK”) is regulated by the Hong Kong Securities and Futures Commission for Dealing in Securities and Dealing in Futures Contracts.

StoneX Financial Pty Ltd (“SFA”)(ACN: 141 774 727) holds an Australian Financial Service License and is regulated by the Australian Securities and Investments Commission (AFSL: 345646).

StoneX Securities Co., Ltd. (“SSJ”)(Co. Reg. No 010401047199) is regulated by the Japanese Financial Services Agency as a Type-I Financial Instruments Business Operator (Kanto Local Finance Bureau (FIBO)No.291’), is a member of the Financial Futures Association of Japan for dealing and broking FX and FX Option transactions, and is a member of the Japan Securities Dealers Association for dealing and broking stock indices and option transactions.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

The report/analysis herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Discover more insights

Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.

Explore subscriptions

StoneX: We open markets

Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.

Reach

With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency

As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise

From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.

Tell us about yourself. Are you a:

First name

Last name

Company

Country

Province/Region

By submitting this form, you are sending StoneX Group Inc. and its subsidiaries your personal information to be used for marketing purposes. View our Privacy notice to learn more.

First name

Last name

Company

Account number

Account holder name (if different from above)

By submitting this form, you are sending StoneX Group Inc. and its subsidiaries your personal information to be used for marketing purposes. View our Privacy notice to learn more.

Perspective: Morning Commentary for October 9

Discover more insights

Top Third Closing Audio Comments

Top Third Opening Audio Comments

Perspective: Morning Commentary for June 12