What to expect from the markets this week, September 25, 2017
Market “Near Term” Snap Shot
- Rice: Price action appears to be corrective
- Cotton: Cautiously Bullish
- Soybeans: Regaining bullish momentum, closing above $10.22 and holding implies a likely price bottom in place
- Corn: Bearish with a bottoming process underway
- Wheat: Holding current price levels implies a building bullish bias
- 10-year Treasury Yield: Sideways-Trading-Range on expectation of U.S. and Global fiscal simulative activities like corporate and individual tax relief and expectations of Fed balance sheet reduction
- S. Dollar: Bearish – Possible corrective activity likely, then the door will open for a decline to 87 or lower
- Oil $WTIC: Consideration now needs to be given to a near-term price floor being in place. The ongoing sideways choppy price action may be more bullish than bearish this week. The $45 to $50 trading range giving way to an upside potential of $55 or higher.
- $CRB Commodity Index: Cautiously optimistic as this index builds a base to move higher
- S&P 500: Primary trend remains up, but cautionary time period with momentum waning and consolidation needed
- Global Equities Excluding U.S. and Canada: Primary trend remains up, but a cautionary time period with momentum ever so slowly declining
- Feeder Cattle: Moving higher
In addition to the following “Expanded near term market outlook considerations for week of Sept. 25.”
- Download Slide Show for charts and expanded details, Click download button below
This Week’s Select Summary Considerations:
- 10-Year US Treasury Yield:
- The 10-Year US Treasury Yield: Sideways-Trading-Range on expectation of U.S. and Global fiscal simulative activities like corporate and individual tax relief and expectations of Fed balance sheet reduction
- What could move the yield lower? Demand, Economic Weakness, Event Risk Concerns, or Other Market Concerns/Factors could take the yield lower
- S. Dollar Index:
- Possible corrective activity likely, but once complete the door is open for a decline to 87 or lower
- Given global macro considerations coupled with no significant global anomaly event moving forward this index may have some serious weakness
- Unless Middle East, North Korean, European, Venezuelan or other anomaly events start to dominate market participant decisions, then we are still in search of a low for the dollar
- CRB Index:
- Cautiously optimistic as this index builds a base to move higher
- Global government and Central Bank actual and anticipated intervention are giving every indication of bearing fruit
- Bigger picture: Though dangerously spastic, global macro and growth forces in general remain supportive of the commodity sector
- $WTIC Light Crude Oil:
- Consideration now needs to be given to a near term price floor being in place. The ongoing sideways choppy price action likely more bullish than bearish this week. The $45 to $50 trading range giving way to an upside potential of $55 or higher.
- A complex, volatile and an uncertain market that deserves a great deal of respect in a world with building economic, social, political and homeland security uncertainties
- North Korea, market structure, geopolitical considerations and building possibilities of a Venezuelan civil war are just some of the supportive factors
- Soybeans:
- Regaining bullish momentum, closing above $10.22 and holding implies a likely price bottom in place
- Given improving complex global macro forces a retest of the $9.00 area or potentially lower into the $8.35 area is becoming increasingly less likely
- Corn:
- Assume bearish until price action becomes more supportive of a bullish case and give consideration to prices moving to their previous 2016 lows of $3.15 or below
- Long Grain Rice:
- Price action appears to be corrective
- Remain aware of potential near term uncertain global economic crosscurrents related to currencies, bonds, equities and commodities as they go through a rebalancing process
- Cotton:
- This week may determine if the bullish bias remains with a price consideration of 91 cents
- Wheat:
- Holding current price levels implies a building bullish bias
- SPY SPDR S&P 500 ETF:
- Primary trend remains up
- A cautionary time period with momentum waning and consolidation needed
- Allow price action to provide guidance
- QQQ NASDAQ Power Shares:
- Consolidation needed
- Near term remain cautious of this index with momentum slowing
- Allow price action to provide guidance
- Primary trend remains up
- EFA iShares ETF - Global Equities Excluding U.S. and Canada:
- Primary trend remains up
- A cautionary time period with momentum ever so slowly declining
- Allow price action to provide guidance
- EEM iShares ETF, Emerging Market Equities:
- A cautionary time period
- Allow price action to provide guidance
Bobby Coats is a professor in the Department of Agricultural Economics and Agribusiness, Division of Agriculture, University of Arkansas System. E-mail: [email protected]
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