Threading the economic needle
The U.S. payroll report released last week revealed that the unemployment rate had risen to 4.1%, the highest since November 2021. A fair enough number in most any economic time, but if rising unemployment continues to be the trend it will start to be a concern. That was the bad, or mediocre, news.
The good news was this week the June monthly Consumer Price Index report showed a decline of 0.1% month on month and a reduction to 3.0% year over year versus 3.3% in May. CPI at 3.0% is the lowest level it’s been in more than three years.
It might finally — finally — be time for the Fed to genuinely look at cutting interest rates. Very possibly it could be before the end of the year, if the latest unemployment and inflation trends continue.
Equity reactions to the inflation data were mixed with both the front month Nasdaq and S&P indices reversing off early contract highs to finish lower on the day, while the Dow Jones remained steady to higher. Talk of traders potentially rotating from tech/AI stocks whose rally might be overdone in the short term to more classical business stocks that have not soared in price recently, which could benefit it from a lower interest environment was the justification for the move.
Cocoa slipper still fits
The 2024 commodity Cinderella is still riding high in the historical price range. While no longer the media darling of the commodity complex, the price continues to grind in wide sideways range between $11,000 per ton and $7,000 per ton with September cocoa futures currently trading around $8,400 per ton. The excitement of the initial bull run has subsided, but a 7-11 trade range is hardly a convenient landing/staging area for market participants trying to position for whatever comes next.
Have a comment or question? Please reach out to derrick.hermesch@pinionglobal.com or call at 785-338-9605
Information contained herein is believed to be reliable but cannot be guaranteed as to its accuracy or completeness. Past performance is no guarantee of future results or profitability. Futures and options trading involve substantial risk of loss and is not suitable for all investors. All information, including this specific material, used and distributed by Paragon Investments LLC (PI) shall be construed as a solicitation for entering into a derivatives transaction. PI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.