Economists and traders have a relatively wide range of estimates on tomorrow's payroll figures. On the low end are those looking at yesterday's release of the ADP/Macroeconomic estimate of 97,000 new private sector jobs created in May. On the upper end, those looking at improved weather conditions and an upswing in the factory sector are calling for a payrolls figure closer to 150,000 new jobs. There is greater consensus on an unchanged unemployment rate, which currently stands at 4.5%. Average hourly earnings – a measure of wage inflation closely watched by Federal Reserve officials – are expected to show a moderate increase of 0.3% in May. Market participants will also be watching for any revisions in the March and April payroll figures. Set your alarm clocks early, as the Labor Department will be releasing the May figures at 7:30 AM Chicago time.

FCOJ futures closed the month of May sharply lower, as speculative and fund selling tied to forecasts for potential rain in the parched citrus growing region of Florida overwhelmed light trade buying. The most active July contract fell to lows not seen since April 20th, as traders report moderate sell-stops being triggered below the recent lows of 154.50. Traders report active spread trading as long-term speculative accounts begin to roll out of July and into the November contract. The next support area for July OJ is seen at 148.00, with major support found at the April 19th lows of 146.00. Resistance is found at 160.50. July Orange Juice closed at 151.40, down 6.10.

Corn: December Corn futures traded higher in early trade, as traders gear up for a possible decline in the U.S. crop ratings last week. The USDA reported 62% of the U.S. Corn crop was rated good to excellent last Monday, down 2% from the prior week. Less than expected rainfall in parts of the Corn Belt may lead to a lower crop rating in this afternoon’s report. At the close of overnight trade, December Corn was trading at $3.38 ½, up 2 cents a bushel.

S&P 500 futures: More volatility is expected in the S&P 500 futures this morning, as traders reassess last week’s 87-point sell off in the S&P futures. Since the re-opening on Sunday, September e-mini S&P futures have traded in a nearly 15-point range, with over 200,000 contracts already being traded as of 6:30 am Chicago time. With no major economic reports out today, traders will look towards corporate earnings reports and any additional news on the sub-prime loan situation to gauge their trading decisions today. In early trade, September mini-S&P 500 futures are trading at $1461.00, up 3.00.

Treasury futures: September 10-year Note futures are trading higher in early trade, following the lead of the European Bond market, as credit spreads continue to widen. This is causing a flow of funds into the Government Bond market, as traders and investors look for a “safe haven” to park funds. September 10-year Note futures are trading at 107-200, up 0-075.

Today on Wall Street, the Dow lost 146 points to bring the average down to 13,211. The S & P 500 dropped 18 to end the day at 1455 while the Nasdaq gave up 37 to close at 2546. Even though most of the day was spent in positive territory, the bears won the battle today with a down market on bad news from the mortgage sector.

Bonds finished the day higher in value with the 10-year note closing with a yield of 4.74%. With news from the mortgage sector pushing the market down, bonds had an “end of day” rally in the last hour of the day.

In the world of economic news, consumer confidence beat expectations coming in at 112.6. This is the highest it has been in six years. Personal spending came in right at expectations at .1% and personal income came in slightly below expectations at .4%.

In Asia, the Hang Seng was up almost 2% at 23,023 and the Nikkei was down slightly at 17,318.

Economic Data Scheduled for Wednesday, August 1, 2007

(All times are U.S. Central Time)

U.S.
9:00 AM: ISM Index (Consensus 55.5)
9:30 AM: EIA Weekly Energy Stocks (Estimate CL -700k)

Canada
None

U.K.
3:30 PM: PMI Manufacturing Index (Consensus 54.0)

European Union
3:00 AM: PMI Manufacturing Index (Consensus 54.8)

Japan
None

Energy futures: After September Crude Oil fell just short of hitting an all-time high of $78.40 for the near-term contract yesterday, a modest profit-taking sell-off is taking place in early trade as traders square their positions ahead of this morning’s EIA weekly energy stocks report. Current estimates are for Oil stocks to have fallen by approximately 700,000 barrels last week, with refinery utilization expected to have increased by 0.7%. Gasoline stocks are expected to have risen by 1.1 million barrels, and distillates – including Heating Oil – are expected to have increased by 1.4 million barrels last week. In early trade, September Crude Oil is trading at $77.69, down $0.52.

Stock Index futures: Yesterday’s sell-off in the U.S. stock market spread overseas, with major European stock indexes down between 1 and 2 percent in early trade. Continued concerns over the subprime loan situation have stock index traders in a selling mood. After falling as low as 1442.25 overnight, S&P 500 futures are starting to come back before the day session begins. In early trade, mini-S&P 500 futures are trading at 1454.75, down 7.25.

Japanese Yen: September Japanese Yen futures rose to 3-month highs this morning, as continued risk aversion selling by large speculators is causing an unwinding of the so-called “carry trades” supporting the Yen. The Australian and New Zealand Dollars and the Euro Currency are among leading currencies taking a hit as the Yen rises. In early trade, September Japanese Yen futures are trading at .8488, up 0.0019.

Today was quite the sea saw battle between the bulls and the bears in the US stock market. In the end, the bulls won today’s battle. The Dow closed the day at 13,366 gaining 154 points. The S & P ended the day 10 points on the positive side of the fence while the Nasdaq closed at 2553, up 7 points.

In the news, pending home sales came out with a surprise increase of 5% for the month of June. This could be a leading indicator of new and existing home sales for the report coming out at the end of August. The ISM index came in below expectations at 53.8. The concensus was 55.5.

Bond yields were on the rise today as the 10 year note closed the day with a yield of 4.78%.

In the overseas markets, the Nikkei closed yesterday at 16,870 (down 2.19%) and the Hang Seng closed at 24,455 (down 3.15%).

Economic Data Scheduled for Thursday, August 2, 2007

(All times are U.S. Central Time)

U.S.
7:30 AM: Initial Jobless Claims (Consensus 310K)
9:00 AM: June Factory Orders (Consensus +1.0%)

Canada
None

U.K.
6:00 AM: BOE Interest Rate Decision (Consensus 5.75%)

European Union
4:00 AM: June PPI Mom (Consensus +0.3%)
4:45 AM: ECB Interest Rate Decision

Japan
None

Stock Index futures: Mini-S&P 500 futures are trading flat this morning after a flurry of buying hit the screen in the last 45 minutes of trading yesterday to send the index up 30 points at its peak and allow for a sharply higher close. European stock index futures are up as well, with gains of between 0.5% and just over 1% seen in afternoon trading in Europe. In early trade, September mini-S&P 500 futures are trading at 1472.00, up 2.00.

Natural Gas: September Natural Gas futures are pushing to the upside in the early going, as traders square positions ahead of this morning’s EIA storage report. Current estimates are for a 76 billion cubic feet (bcf) build in Natural Gas stocks last week. Currently, 2.763 trillion cubic feet (tcf) of Gas is in storage – a record high for this time of year. In early trade, September Natural Gas is trading at 6.395, up 0.043.

British Pound: September British Pound futures are trading slightly higher this morning after the Bank of England (BoE) voted to keep interest rates unchanged at 5.75%. Though widely expected, there is now talk that the BoE will raise rates 25 basis points at its September meeting. In early trade, September British Pound futures are trading at 2.0291, up 0.0024.

Economic reports out today: U.S. economic data is light today, as traders gear up for tomorrow’s Non-farm Payrolls report. Today’s agenda includes:

7:30 AM CDT: Initial Claims for 7/28 (consensus 310k vs. 301k prior)

9:00 AM CDT: June Factory Orders (consensus +1.0% vs. –0.5% prior)

The U.S. stock markets continued their late-day rally habits today, with all three benchmarks finishing to the upside. The Dow gained an even 100 points to finish at 13,463, while the S&P added 6 to close at 1472. The NASDAQ finished ahead 22 at 2575.

Initial Claims came in below expectations today at 307,000 versus estimates of 310,000. Factory Orders came in at .6%, well below the 1% expectation. Tomorrow will be a more active day on the economic calendar, with both Unemployment and Non-farm Payrolls set to be released.

Bonds had a relatively flat day, with the yield on the 10-year Note moving up 1 basis point from 4.76 to 4.77. The spread between the 2- and 10-Year Notes remains the same at 18 basis points.

Overseas, the Nikkei finished at 16,984 (up .67%) and the Hang Seng moved down less than .1%, closing at 22,443.

Economic Data Scheduled for Friday, August 3, 2007

(All times are U.S. Central Time)

U.S.
7:30 AM: July Non-farm payrolls (Consensus +135K)
7:30 AM: July Unemployment rate (Consensus 4.5%)
7:30 AM: July Average hourly earnings (Consensus +0.3%)
9:00AM: July ISM Non-Manufacturing Index (Consensus 59.5)

Canada
None

U.K.
3:30 AM: July Purchasing Managers Services Index (Consensus 57.4)

European Union
3:00 AM: July Purchasing Managers Services Index (Consensus 58.1)
4:00 AM: June Retail Sales MoM (Consensus +0.8%)

Japan
None

Treasury futures: September 10-year Note futures are down slightly in early trade this morning, as traders gear up for the Non-farm payroll figures for July. Estimates are for payrolls to have increased moderately with approximately 135,000 new jobs created. The unemployment rate should continue to remain steady at 4.5%, and average hourly earnings are expected to increase by 0.3%. In early trade, September 10-year Notes are trading at 107-135, down 0-015.

Stock index futures: Can we end the week on a high note? That is the question on stock index traders’ minds this morning after a wild trading week. The focus today will initially be on this morning’s jobs report, as steady job growth and moderate wage inflation are the expected outcome of today’s Labor Department report. However, concerns about the subprime loan situation will continue to garner attention. In early trade this morning, September e-mini S&P 500 futures are trading at 1479.50, down 2.25. Volume is a moderate 54,825 contracts as of 6:27 AM Chicago time.

Gold: December Gold futures look to end the week in positive territory, as moderate U.S. Dollar weakness and a continuing strike threat at three of South Africa’s biggest Gold producers is underpinning prices this morning. However, the China Gold Association announced yesterday that China’s Gold production was up 15% in the first half of 2007, producing 122.5 metric tons. In early trade, December Gold is trading at $677.00, up $0.40.

Economic reports out today:

(All times are U.S. Central Time)

7:30 AM: July Non-farm payrolls (Consensus +135K)
7:30 AM: July Unemployment rate (Consensus 4.5%)
7:30 AM: July Average hourly earnings (Consensus +0.3%)
9:00AM: July ISM Non-Manufacturing Index (Consensus 59.5)

Crude Oil: Follow-through selling from Friday’s weak close is keeping Crude Oil futures on the defensive in early trade. In addition, OPEC exports for July climbed by 181,000 barrels a day in July to 30.72 million barrels, according to a Dow Jones Newswire survey. Technical traders will note that September Crude Oil fell below the widely watched 20-day moving average today, which sparked further long liquidation selling. In early trade, September Crude Oil is trading at $74.06, down $1.42

S&P 500 futures: Buying emerged in the S&P 500 futures this morning, taking back some of the sharp losses from Friday after a disappointing U.S. Non-farm payrolls report. Lower Crude Oil prices and a rally in some of the major European stock indexes are helping support S&P futures this morning. In early trade, the September mini-S&P 500 futures are trading at 1453.00, up 10.00.

Soybeans: November Soybeans fell in overnight trading, as rain in Iowa and Illinois over the weekend figures to benefit the Soybean crop during its key pod-setting stage. In addition, traders will be squaring their positions this week ahead of the USDA August crop report due out on Friday. At the end of the overnight session, November Soybeans are trading at $8.46 ¾, down 14 ¼ cents.

No major U.S. economic reports scheduled today.

Stock Index futures: Equity index traders may get a bit of a reprieve this morning after several days of extreme volatility, as the market gears up for the end of FOMC meeting this afternoon and the announcement on interest rates. The market expects the Fed to keep interest rates steady at 5.25%, but will be keenly interested in its statement after that decision is announced, especially in regards to how the Fed plans to handle the fear surrounding the subprime loan situation. In early trading, September S&P 500 futures are trading at 1467.00, down 0.75

Wheat: Another day, another contract high in December Wheat futures in Chicago, as surging demand due to tight world supplies has traders continuing to bid up prices. Weekly Wheat export inspections came in at 25.127 million bushels for the week ending August 2nd, well above the high end of estimates. Morocco issued a tender for 630,000 metric tons of option origin soft Wheat, which is deemed supportive to U.S. Wheat futures. Paris million Wheat futures hit another new all-time high this morning, trading as high as EUR220 a metric ton in the November contract. The U.S. Winter Wheat harvest is nearly completed, with the USDA reporting 94% harvested so far, up 6% from last week, and 3% above the five-year average. At the end of the overnight session, December Wheat was trading at $688 ½, up 5 cents a bushel.

Lean Hogs: October Lean Hog futures plunged yesterday after reaching contract highs on Friday, as traders liquidated long positions fearing a decline in wholesale pork demand while slaughter rates continue to increase. However, prices may remain volatile in the near-term, as many believe China, the world’s largest pork consumer, will need to increase its imports of pork due to a supply shortage after disease ravaged the country’s pig crop. Wholesale pork prices in China were up 44% through July due to supply shortages. October Lean Hogs closed yesterday at 75.05, down 2.55.

U.S. Economic reports for August 7th 2007

7:30 AM: 2Q Advance Productivity (Consensus +2.0%)
1:15 PM: FOMC Policy Statement
2:00 PM: June Consumer Credit (Consensus $6 Billion)

Stock index futures rose for the third consecutive session, with S&P 500 futures hitting nearly 2-week highs as traders returned to the equities markets. September S&Ps closed up 21.10 to end the session at 1503.50, while September Dow futures closed up 157 at 13705, and September NASDAQ 100 futures ended the day up 26.00 for an even 2000.00.

Treasury futures tumbled, as flight-to-quality buying ceased and a disappointing 10-year Note auction weighted on prices. September 30-year bonds closed at 108-30, down 1-08, and September 10-year Notes closed at 106-275, down 0-225.

Economic Data Scheduled for Thursday, August 9, 2007
(All times are U.S. Central Time)

U.S.
7:30 AM: Initial Claims for week ending Aug 4th(Consensus 310,000)

Canada
7:30 AM: June New Housing Price Index YoY (Consensus 0.7%)

U.K.
3:30 AM: Total Trade Balance for June (Consensus -3.900 billion)

European Union
3:00 AM: ECB publishes monthly report (Aug)

Japan
6:50 PM: July Domestic Corporate Goods Price Index MoM (Consensus 0.6%)

S&P 500 futures: S&P 500 futures are well in the red in early trade after three consecutive up days, as two large European banks reported losses in the U.S. subprime loan markets, sparking fears that credit concerns will spread to Europe. In early trade, September mini-S&P 500 futures are trading at 1488.75, down 15.25.

Natural Gas: Lead month September Natural Gas is trading moderately higher this morning, as traders gear up for the weekly EIA Gas storage report due out at 9:30 AM Chicago time. According to a Dow Jones Newswire survey, traders and analysts are expecting a build of 53 billion cubic feet (bcf) last week. Last year at this time, there was a withdrawal of 7 bcf. Current gas in storage totals 2.840 trillion cubic feet. In early trade, September Natural Gas is trading at 6.295, up 0.029.

Wheat: December Wheat futures hit another contract high in overnight trading, climbing above key resistance at $7.00 per bushel on concerns that the USDA will lower harvest estimates for European and Australian Wheat – as well as U.S. Winter Wheat production – in tomorrow’s USDA crop production and supply/demand report. Paris milling Wheat also made a new record high today, trading up 3.2% to 227 Euro per ton. At the close of the overnight session, December Wheat was trading at $7.06, up 7 ½ cents per bushel.

Economic Data Scheduled for Thursday, August 9, 2007
(All times are U.S. Central Time)

U.S.
7:30 AM: Initial Claims for week ending Aug 4th (Consensus 310,000)

Canada
7:30 AM: June New Housing Price Index YoY (Consensus 0.7%)

The bears came to the table again today for another feast. The Dow dropped 386 points on the day for almost a 3% loss. The S&P 500 lost 44 and the NASDAQ gave up 56, while the bond markets closed higher and the Ten-year Note ended the day with a yield of 4.78%.

Subprime loans were the hot topic once again in the market. French banking group BNP Paribus suspended three funds that had exposure to US credit markets, saying it was due to the “complete evaporation of liquidity.”

Initial Claims came out today at 316,000, above the expected 310,000.

Over in Asia, the Nikkei is coming off a gain of just under 1%, while the Hang Seng lost about .5% in its last trading session. Written by Mike Tosaw, Director of Education

Economic Data Scheduled for Friday, August 10, 2007

(All times are U.S. Central Time)

U.S.
7:30 AM: Import/Export prices for July
7:30 AM: Crop Production and Supply/Demand Report
1:00 PM: Treasury Budget for July (Consensus-$33.0 billion)

Canada
6:00 AM: July Net Change in Employment (Consensus 23.5)
6:00 AM: July Unemployment Rate (Consensus 6.1%)

U.K.
None

European Union
1:45 AM: (France) June Industrial Production MoM (Consensus 0.4%)

Japan
12:00 AM: July Consumer Confidence Households (Consensus 46)

Grain futures: It was a fairly quiet night in the Grain futures markets, as traders saved their strength for this morning’s USDA crop production and supply/demand report. Corn traders are looking for a moderate increase in production from the July report, with average estimates for a 12.909 billion bushel crop versus 12.840 billion in July. Soybeans are expected to also show a slight production rise to 2.653 billion bushels, up 28 million bushels from July’s report. All U.S. Wheat production is expected to decline, with average trade estimates calling for 2.129 billion bushels versus the 2.138 billion bushels in July’s report. At the close of the electronic overnight session, December Corn was trading at $3.45, down 3 1/4, November Soybeans were trading at $8.82, up 4 ½, and December Wheat was trading at $6.88 ½, down 1 ¼.

Cotton: U.S. Cotton production is expected to show a slight improvement in today’s USDA report, with average estimates calling for a 17.70 million-bale crop, up from 17.50 million bales in the July estimate. This is still well below 2006 production of 21.59 million bales, as producers switched acres from Cotton to Corn and Soybeans. In early electronic trade, December Cotton is trading at 6224, down 18.

Stock Index futures: No recovery in U.S. Stock index futures this morning, as major foreign stock indexes continue to slump, with the DAX 30 currently down 1.6%, the FTSE 100 down 3.01% and the Nikkei 225 closing down 2.37%. The European Central Bank added an additional 61.05 billion Euros ($83.6 billion) into the banking system today after yesterday’s 94.8 billion Euro injection. The Central Banks of Canada, Australia, and Japan joined the U.S. Federal Reserve in adding funds to help stem a short-term credit crunch. In early trade this morning, the September e-mini S&P 500 index was trading at 1440.00, down 18.00, while September mini-Dow futures are trading at 13185, down 142.

Mike Zarembski, Senior Commodity Analyst

Stock Index futures: After Friday’s volatile session, Stock Index futures are higher in early trade this morning, following assurances of liquidity from the Federal Reserve, European Central Bank, and Bank of Japan on Friday. European Stock indexes are higher this morning, lending some support to the U.S. market. On the economic calendar today is the release of Retail Sales figures for July at 7:30 AM Chicago time, with expectations for a rise of 0.2%, with ex-autos expected to show an increase of +0.4%. In early trade, September e-mini S&P 500 futures are trading 1461.75, up 10.75.

Copper: After falling to nearly 2-month lows on Friday, September Copper futures are showing signs of a recovery this morning, as rising demand from China, a decline in exchange stockpiles, and higher equity prices are combining to support prices. According to preliminary customs data from August 10th, Chinese Copper imports are up 49% from a year ago to stand at 1.72 million metric tons. In addition, Copper inventories in Shanghai fell by 1.7% last week, coming in at just below 90,000 mt. The London Metal Exchange reported Copper stocks fell by 200 mt this morning to stand at 114,300 mt. In early trade, September Copper is trading at 341.25, up 5.30.

Corn: Buyers continue to support Corn futures in overnight trading, as disappointing weekend rainfall amounts in parts of Iowa and Illinois have some traders concerned about potential yield losses due to the hot and dry weather. The recent rally comes despite Friday’s USDA estimates for a 13.054 billion bushel Corn crop. However, some traders are skeptical about this total given the iffy growing conditions in some parts of the Corn Belt. At the end of the overnight session, December Corn was trading at $3.54 ¼, up 3 ¾ cents.

Economic Data Scheduled for Monday, August 13, 2007

(All times are U.S. Central Time)

U.S.
7:30 AM: July Retail Sales
9:00 AM: June Business Inventories

U.S. Stock Index futures closed higher this afternoon, but well off the day’s highs, as traders continue to fear that the economy will show signs of slowing due to continued concerns over credit conditions and a weak U.S. housing market. September S&P 500 futures closed at 1454.60, up 3.60, and September Dow Jones futures closed at 13255, up 18. Treasury futures staged a late rally, with September Bond futures ending the session up 5/32 to settle at 109-15. Traders will be looking towards tomorrow’s PPI figures, with the consensus estimate for a 0.1% rise, and the “core” rate without food and energy prices up 0.2% in July.

Economic Data Scheduled for Tuesday, August 14, 2007

(All times are U.S. Central Time)

U.S.
7:30 AM: July PPI (Consensus 0.1%, Core 0.2%)
7:30 AM: June Trade Balance (Consensus -$61.0 billion)

Canada
None

U.K.
3:30 AM: July CPI MoM (Consensus -0.2%)

European Union
1:00 AM: (Germany) 2nd qtr GDP (Consensus 0.4%)
4:00AM: 2nd qtr GDP MoM (Consensus 0.5%)

Japan
None

Bears feasted on bulls again this afternoon, as September S&P500 futures fell by 21.10 to close at 1434.00. European indexes were also in the red, with the September DAX 30 index falling 41.50 to close at 7463.00, and the September FTSE 100 shedding 84 points to close at 6161.50. Bond futures were moderately higher, with the September contract gaining 11/32 to close at 109-26.

Traders will focus on tomorrow’s release of July’s CPI, as analysts look for a moderate rise of 0.1%, with the “core” index expected to increase by 0.2%. In addition, energy traders are expecting a nearly 2 million barrel drop in U.S. Crude stocks last week in the Energy Information Administration’s weekly energy stocks report tomorrow at 9:30 AM Chicago time.

Economic Data Scheduled for Tuesday, August 15, 2007

(All times in U.S. Central Time)

U.S.
7:30 AM: July CPI (Consensus 0.1%, Core 0.2%)
8:15 AM: July Industrial Production (Consensus 0.3%)
8:15 AM: July Capacity Utilization (Consensus 87.1%)
9:30 AM: EIA Energy Stocks report

Canada
None

U.K.
3:30 AM: Bank of England minutes

European Union
None

Japan
None

Japanese Yen: Lead-month September Japanese Yen futures soared to highs last seen in July of 2006, as a sell-off in many of the major stock markets continues to inspire a flight to “safe haven “ securities such as short term government debt and traders continue to liquidate “carry trades.” Traders will also be closely watching today’s U.S. housing starts figures for July, with expectations for a slowdown to an annualized pace of 1.4 million versus 1.467 last month. In early trade, September Japanese Yen futures were hovering at 0.8788, up 0.0199.

S&P 500 futures: No recovery in early trade for U.S. Stock Index futures, as a sell-off in major world stock markets has caused the September mini-S&P 500 contract to fall below the 1400.00 level for the lead month contract for the first time since March. The beneficiary of the flight of funds from the stock indexes appears headed to U.S. Treasuries, with the yield on the two-year note falling to a 22-month low this morning. In the early going, September S&P 500 futures are trading at 1393.75, down 20.75.

Crude Oil: Lead month September Crude Oil gave back all of yesterday’s gains and then some in early trade, as fears of a global economic slowdown tied to falling equity markets caused fresh selling in the Crude market. This comes despite yesterday’s weekly EIA report showing U.S. Crude inventories falling by a larger-than-expected 5.17 million barrels last week. However, traders will be watching the track of Hurricane Dean, which is located about 500 miles east of Barbados early this morning. Though it is still too early to tell if the refinery operations along the U.S. Gulf Coast will be affected by this storm, traders are preparing for increased volatility in the Crude market going into the weekend. In early trade, September Crude Oil stands at $71.46, down $1.87.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Thursday, August 16, 2007

(All times in U.S. Central Time)

U.S.
7:30 AM: July Housing Starts (Consensus 1.405 million)
7:30 AM: July Building Permits (Consensus 1.400 million)
7:30 AM: Initial Claims for week ending 8/11 (Consensus 315,000)
11:00 AM: Philadelphia Fed for August (Consensus 8.0)

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It was hard to find much green on the commodity quote boards today as liquidation selling pummeled nearly every commodity sector. Some of the highlights (or lowlights): December Cotton closed down the 300-point limit, September Lumber was down 9.50, November Soybeans were down 40 cents, December Gold was down $21.40, October Live Cattle was down 2.07, September Crude Oil dropped $2.33, and the list went on an on. The continuing shakeout from the credit crisis has spurred a flight to liquidity, with traders and investors looking to seek refuge in short-term government debt. Fundamentals were largely ignored in many markets, as forced liquidation of positions took center stage with margin calls looming. However, as of 2:46 PM Chicago time, the S&P 500 futures have staged a bit of a rally, and if they can finish unchanged or higher, we may see a different outcome in the commodity markets tomorrow.

Soybean futures were hit hardest in the grain complex sell-off this afternoon, with the most-active November contract falling the 50-cent limit at one point in the session to its lowest levels since mid-May. The entire commodity complex had been under pressure today due to the continued rush for liquidity in the wake of recent financial turmoil. Also weighing on the Soybean products was the improved chances for rainfall in the Midwest, including previously parched sections of the region. U.S. weekly Soybean exports came in at 313,300 metric tons for the week ending August 9th, with 236,000 mt for the 2006-07 marketing year. Soy products were not immune from the sell-off, as December Bean Oil posted triple-digit losses on the back of sharply lower Crude and Malaysian Palm Oil futures, and December Soy Meal broke through near-term resistance at the 20- and 100-day moving averages. The next support point for November Soybeans is seen at the psychologically important $8.00 level, with resistance found at the 100-day moving average of $8.34. November Soybeans closed at $8.14 ½, down 40 cents.

Energy futures: After yesterday’s sharp sell-off in the energy complex and most other commodity markets, there’s been a bit of a recovery this morning as Crude Oil and energy product futures are trading moderately higher to start the day. Traders are beginning to focus on Hurricane Dean, which moved past the islands of St. Lucia and Martinique this morning as a category 2 hurricane. The current path has Dean moving west and possibly into the Gulf of Mexico, where a large potion of U.S. Oil and Gas production is located. In early trading, September Crude Oil is trading at $71.69, up $0.69 and September RBOB Gasoline is trading at $2.0201, up $0.0021

Nikkei 225 futures: Japan’s leading stock index future couldn’t find support from the late recovery in the U.S index futures markets, as a soaring Yen had traders fearing Japanese exports would be hurt. This caused the index to hit lows not seen in just over a year. In early going at the CME, September Nikkei futures were trading at 15395, down 555.

U.S. Stock Index futures: Yesterday’s dramatic late rally in the major U.S. indexes failed to support prices in early trade this morning, as spillover from a weak finish in Japan and continued fears that the worst of the credit crunch may not be behind us have put sellers back in control so far. Economic releases will be light today, with the
preliminary University of Michigan consumer sentiment survey for August on tap. In early trade, September e-mini S&P 500 futures are at 1412.25, down 12.25, and September mini-Dow futures stand at 12827, down 117.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Friday, August 17, 2007

(All times in U.S. Central Time)

U.S.
9:00 AM: University of Michigan Sentiment Index (Consensus 88.5)
2:00 PM: Cattle on Feed

Energy futures: After briefly falling below $69 on Tuesday, analysts will be watching for a rebound in Oil prices after this morning’s weekly EIA energy stocks report. Traders are anticipating between a 2.5 million and 3 million barrel decline in Crude stock last week, with the continued backwardation of Oil futures prices discouraging the storing of Oil. Gasoline stocks are expected to fall by between 600,000 and 800,000 barrels and Distillates – including Heating Oil – are expected to show a build of 800,000 barrels last week. In early trade, October Crude Oil is at $69.84, up $0.27, October RBOB Gasoline is at $1.8312, up $0.0135, and October Heating Oil is at $1.9770, up $0.0070.

Canadian Dollar: Fears that tightening credit concerns worldwide will force the Bank of Canada to change course and lower interest rates at its September 5th meeting have hurt the Canadian Dollar. With rates currently at 4.5%, the market initially was looking for one or perhaps two more rate hikes by the end of 2007, with inflation standing as the Bank’s top priority. However, in light of the recent credit crunch that view has changed, and short-term Canadian interest rate futures are now pricing in rate cuts by the end of the year. However, continued belief that the U.S. Federal Reserve will cut interest rates at its September 18 meeting has put a bid into the “loonie” this morning. In early trade, the September Canadian Dollar is sitting at 0.9456, up 0.0054.

Stock Indexes: Higher Stock Index futures in Europe are spilling over to the U.S. market, as traders believe the Federal Reserve will lower rates to help stem the credit crisis and keep the U.S. economy on track. This comes after yesterday’s meeting with Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson, and Senate Banking Committee Chairman Christopher Dodd, in which Dodd was quoted as saying that Bernanke agreed to use “all of the tools at his disposal'' to help stabilize the financial markets. Many analysts believe this includes lowering the Fed Funds rate at the Fed’s upcoming September 18th meeting. In early trade, September e-mini S&P500 futures are at 1460.75, up 10.50, and September Dow Jones futures are at 13191, up 74.

Mike Zarembski, Senior Commodity Analyst

US stocks were relatively flat today, as both the Dow and the S&P 500 finished down just one point, while the NASDAQ lost 11 on the day. Over in the bond market, the yield on a 10-year Note fell to 4.63%.

Initial Claims came in slightly above expectations this week at 322,000 versus a consensus expectation of 320,000. Tomorrow, traders will be waiting to see what the New Home Sales numbers are going to be. Although the discount rate cut will not be factored into the number (positive or negative), it will interesting to see if we get a break in the bad news from the housing sector or continued downward momentum.

In the Asian markets, the Nikkei finished ahead 2.6% and the Hang Seng ended its last trading session 2.7% to the upside.

Treasuries: Traders will be watching the Bonds today with New Home Sales set to be announced at 9:00 AM Chicago time. With the expectation at 825,000, we will see if there is a rush to Bonds after the announcement, business as usual, or reason to get out of the Treasuries. Last month’s Housing Starts number did give an indication that we may get some good news today in the housing market, but building permit numbers were down from expectations a month earlier. In the early going, the 10-year Note is trading higher.

S&P e-mini: The S&P 500 is just coming off of its starting point for 2007. Although we did dip into negative territory for a while last week, the stock market has since gained some ground back to the positive side. The S&P never quite hit its lows for the year from back in March, but it did come close. Traders will be watching to see whether the market will consider where we have been support, or will it test the yearly lows from March? The S&P e-mini contract was trading down 3 points at 6:00 AM Chicago time.

Coffee: Coffee is holding its own of late. It could have continued to drop earlier in the summer, but instead managed to hold on around the 110-115 mark, and has remained more or less range-bound between 110-120 for the summer. Are we seeing a bottom forming or is Coffee due for a breakout to the downside in the next few weeks? In early trade, Coffee was slightly higher this morning.

S&P 500 futures closed higher today at 1468, primarily on good news from the economic calendar. New Home Sales came in at 870,000 versus expectations of 820,000, while Durable Orders increased 5.9%, well above the expected 1%. Monday’s Existing Home Sales number will also play a part in what the market does next week. With all of the bad press that the subprime market has been generating lately, today’s news gave bulls a reason to get out on the floor and dance.

On the charts, the S&P 500 was above the 1500 level briefly on August 8th, and as of today’s close we are 20 points away from that mark again. The previous flirtation with this level created a resistance point, so bulls will need some momentum to stage a true rally and send the S&P back over 1500.

Copper: Lead month September Copper fell sharply in early trade, as exchange warehouse stocks increased sharply this morning. The London Metal Exchange (LME) announced that Copper stocks increased by 10,075 metric tons to stand at 135,625 mt. In addition, a large increase of Nickel stocks on the LME was also weighing on the base metals complex. In early trade, September Copper was trading at 327.30, down 7.65.

Wheat: Chicago December Wheat fell just short of a new record high in overnight trade, as traders look for a continuation of the strong demand for U.S. Wheat while the weather plays havoc with growing conditions worldwide. Major Wheat exporters such as Canada, Ukraine, France and Australia have had production problems thanks to unpredictable weather this year. This morning, Egypt is looking to buy 60,000 mt of Wheat and Bangladesh plans to import 50,000 mt. At the end of overnight trade, December Wheat was at 748 ¾, up 10 ¾ cents.

Stock Index futures: Weakness in several European and Asian markets this morning is spilling over into U.S. trading, with e-mini S&P 500 futures trading in the red. This morning’s report on consumer confidence for August is expected to show a decline from the 112.6 reading in July. The Conference Board will release the figures at 9:00 AM Chicago time. In early trade, September e-mini S&P 500 futures are trading at 1463.00, down 6.75.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Tuesday, August 28, 2007

(All times in U.S. Central Time)

U.S.
9:00 AM: Consumer Confidence for August (Consensus 104.5)
1:00 PM: FOMC minutes from August 7th meeting

Stock Index futures fell sharply this afternoon, as the Conference Board reported consumer confidence fell sharply in August to 105.0 after posting a 111.9 in July. In addition, S&P/Case-Shiller reported property values in 20 metro areas fell by 3.5% in June from year-ago levels. Stock Index traders did not react kindly to this news, sending the September e-mini futures down by 31.50 points to stand at 1438.25. September NASDAQ 100 futures closed down 42.75 to end the session at 1907.75.

Treasury Futures finished on the upside, with the September 30-year Bond closing at 111-20, up 0-09, and the September 10-year Notes settling at 109-160, up 0-210.

Economic Data Scheduled for Wednesday, August 29, 2007

(All times in U.S. Central Time)

U.S.
9:30 AM: Weekly EIA Energy Stocks Report

Great Britain
None

Canada
None

European Union
1:10 AM:(Germany) Gfk Consumer Confidence Survey (Consensus 8.5)

Japan
6:50 PM: Retail Trade MoM for July (Consensus -1.1%)

Wheat: Chicago Wheat futures traders have had an exciting morning so far, with a surge in the last 90 minutes of the overnight session sending prices for the December contract to an new all-time high of $783 ½. Though no specific news seems to be responsible for the move, traders remain nervous over world Wheat ending stocks, with the Australian Wheat crop now forecasted to be in the 20 to 22 million metric tone range. However, rainfall has been light again this season, and many traders fear that this estimate may be overly optimistic once the harvest begins. Iraq has issued a tender to buy 50,000 of Hard Wheat this morning. At the end of the overnight session, December Wheat was trading at $7.81 ½, up 23 cents.

Stock Index Futures: The roller coaster ride for index traders continued this morning, as September e-mini S&P 500 futures gave back a portion of yesterday’s 27.25 point gain ahead of this morning’s release of the next preliminary estimate of 2nd quarter U.S. GDP. Expectations are for an increase to 4.1% versus the previous estimate of 3.4% growth rate, due mostly to a narrower-than-expected trade gap in June. In early trade, September e-mini S&P 500 futures were trading at 1457.75, down 7.75.

Dollar Index: September Dollar index futures were strong in early morning trade, as the seven major CME currency futures were all trading in the red after the Bank of England announced that it loaned 1.6 billion pounds at the penalty rate of 6.75 %. This news continued to stoke fears that the recent credit crunch is far from resolved, sending currency traders to safe haven buying of the U.S. Dollar. In early trade, September Dollar Index futures were trading at 80.96, up 0.32.

Mike Zarembski, Senior Commodity Analyst

Stock Index Futures: Sharp gains are seen in U.S. Stock Index futures market this morning, as President George Bush will announce a plan to help subprime mortgage holders. It is believed the President will allow the Federal Housing Administration to guarantee loans for borrowers who are delinquent, which should help to avoid foreclosure and even allow refinancing of the loans at more favorable terms. Index traders are reacting positively to the news, as it should help ease the recent credit crunch brought on by the subprime loan situation. In early trade, September e-mini S&P 500 futures were trading at 1477.75, up 16.25.

Treasury futures: President Bush’s plan to help subprime mortgage holders is doing no favors for Treasury bulls, as traders start to price in a reduced chance of multiple Federal Reserve interest rate cuts. The short end of the yield curve has been particularly hard hit this morning, with December 2-year Note futures trading lower by 0-0850, at 102-3150.

Wheat: The historic $8 per bushel level didn’t put up much of a fight in overnight trade, as Chicago Wheat prices stormed to another new all-time high price of $8.07 ¾ for the December contract. With below-average production from most of the world’s leading Wheat exporters, world Wheat ending stocks are expected to be at 26-year lows for the 2007-08 marketing year. Now traders are starting to fear that dry conditions in Australia and Argentina – both among the Southern Hemisphere’s leading Wheat producers – will cut yields there as well. India’s State Trading Corporation is tendering for a large amount of Wheat, with some analysts believing India may be in the market for as much as 700,000 tons. Paris million Wheat futures also made new-all time highs this morning, rising by 7% to 272 Euro per ton. At the end of the overnight session, December Chicago Wheat was trading at $8.05 ¼, up 20 ¾ cents.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Friday, August 31, 2007

(All times in U.S. Central Time)

U.S.
7:30 AM: Personal Income for July (Consensus 0.3%)
7:30 AM: Personal Spending for July (Consensus 0.3%)
7:30 AM: Core PCE Inflation for July (Consensus 0.2%)
8:45 AM: Chicago PMI for August (Consensus 53.0)
9:00 AM: Factory Orders for July (Consensus 3.0%)
9:00 AM: University of Michigan Consumer Sentiment for August (Consensus 83.0)

Gold: After trading at 5 ½ week highs and moving above the key $690 level yesterday, profit-taking selling has emerged in early Gold trade this morning, with weakness in European and Asian stock markets and a stronger U.S. Dollar index giving traders a reason to lighten up on long positions. Currently, December Gold is trading at $688.90, down $2.60

British Pound: Consumer confidence levels fell to 4-month lows this morning, as the Nationwide Building Society’s index of sentiment fell to a reading of 94 – its lowest level since April. The spending index bottomed out for the year, dropping 7 points to a reading of 79. This sent September British Pound futures lower, as traders believe the Bank of England will keep interest rates steady tomorrow. In early trade, September British Pound futures are trading at 2.0102, down 0.0039.

S&P 500 futures: September e-mini S&P 500 futures are giving back most of yesterday’s gains in early trade this morning, as traders fear recent upheaval in the credit markets will hurt earnings in the 3rd quarter. Also hurting stock futures was the forecast from the Organization for Economic Cooperation and Development lowering its 2007 growth estimate for the U.S. to 1.9%, down 0.2% from the previous forecast. In early trade, September e-mini S&P 500 futures were trading at 1479.50, down 10.00.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Tuesday, September 5, 2007
(All times in U.S. Central Time)
U.S.
9:00 AM: Pending Home Sales for July
1:00 PM: Fed Beige Book

A disappointing Pending Home Sales report and fears that Friday’s payrolls report will show sluggish jobs growth weighed on stock indexes today, with the S&P 500 losing 17.13 and the Dow Jones falling by 143.55.

Treasuries were the biggest benefactor of today’s stocks slump, with the Ten-year Note yielding 4.47% and the Two-year Note yielding 4.02%. Traders will be focusing on Friday’s Non-farm Payrolls report for August, with expectations of an increase of 110,000 jobs. The unemployment rate is expected to remain steady at 4.6%

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Thursday, September 6, 2007
(All times in U.S. Central Time)

Japan

None

Stock indexes posted modest gains this afternoon as traders gear up for tomorrow’s Non-farm Payrolls report for August. The consensus is for payrolls to have increased by 110,000 jobs last month, but some analysts are looking for a lower figure in light of layoffs in the mortgage industry following the subprime loan fallout. The unemployment rate is expected to remain steady at 4.6%.

Treasury futures were lower to close afternoon trade, with December Ten-year Note futures falling by 0-070 to close at 109-160, and December Two-year Note futures ending the session at 103-0875, down 0-0275.

Economic Data Scheduled for Friday, September 7, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: Non-farm Payrolls for August (Consensus 110,000)
7:30 AM: Unemployment Rate for August (Consensus 4.6%)
7:30 AM: Average Hourly Earnings for August (Consensus 0.3%)
9:00 AM: Wholesale Inventories for July (Consensus 0.5%)

Great Britain
None

Canada
6:00 AM: Unemployment Rate for August (Consensus 6.1%)

European Union
1:00 AM: (Germany) Trade Balance for July (Consensus 15.6 billion)
5:00 AM: (Germany) Industrial Production for July (MoM) (Consensus 0.9%)

Japan
12:00 AM: Leading Economic Index for July (Consensus 70.0)

Stock Index Futures: September e-mini S&P 500 futures are lower in early morning trade, as traders gear up for this morning’s release of the August U.S. jobs report. Job growth is expected to show a slight rise from July, despite the recent U.S. housing slump and credit crunch. The majority of estimates range from between 90,000 and 110,000 new jobs created in August versus 92,000 in July. Meanwhile, the unemployment rate is expected to remain at 4.6%. The Labor Department will release the data at 7:30 AM Chicago time. In early trade, September e-mini S&P 500 futures are trading at 1474.25, down 5.25.

Treasury Futures: Financial traders also await this morning’s NFP report. A weaker-than-expected increase in jobs last month just might be the final key to unlock the Federal Reserve’s tightening bias and convince Fed Governors that the markets are correct in their assessment that a rate cut is necessary at the September 18th meeting. In quiet early morning trade, the December Ten-year Note is trading at 109-180, up 0-020, and the December Two-year Note is trading at 103-0700, down 0-0175.

Gold: The yellow metal rose to highs not seen since mid-2006, as investors and traders are now starting to return to Gold as a “safe haven” investment in the wake of increased volatility in the stock and bond markets due to turmoil in the credit markets. In addition, the belief that the Fed will cut interest rates by at least 25 basis points this month could hurt the U.S. Dollar, but would benefit Gold. In early trade, December Gold is trading at $706.60, up $2.00.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Friday, September 7, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: Non-farm Payrolls for August (Consensus 110,000)
7:30 AM: Unemployment Rate for August (Consensus 4.6%)
7:30 AM: Average Hourly Earnings for August (Consensus 0.3%)
9:00 AM: Wholesale Inventories for July (Consensus 0.5%)

What a way to end a holiday-shortened week, as traders brush off the “unofficial” end of summer and face a shockingly weak Non-farm Payrolls report for August. This morning the Labor Department reported that payrolls for August fell by 4,000 jobs versus pre-report expectations of a rise of between 90,000 and 110,000 jobs. As if that were not enough to send shivers through Fed officials, job creation figures for July were also revised down from the 92,000 originally reported to only 68,000, and June payrolls were lowered from 126,000 jobs to just 69,000. Once again, manufacturing jobs suffered, falling by 46,000 jobs last month – the sharpest drop in over 4 years. The slump in the U.S. housing market is starting to take its toll on the labor market as well, with the construction sector shedding 22,000 jobs. Not even government could help the labor market, as public sector jobs fell by 28,000. Service sector hiring was one of the few bright spots in today’s numbers, posting a fairly modest 60,000 jobs gain. The unemployment rate held steady at 4.6%, and average hourly earnings met expectations, rising by 0.3%.

Short-term interest rate futures were the biggest gainers on today’s news, with December Fed Funds futures pricing in a 4.25% Fed Funds rate by end of the year and a 50% chance that rates could be cut to 4%. The Fed Funds rate currently stands at 5.25%. The long end of the yield curve was also in a bullish mode, with December 30-year Bonds moving up by over one full point at the day’s peak. Stock indexes were down sharply across the board, with the Russell 2000 and S&P 400 mid-cap futures among the hardest hit. The U.S. Dollar plunged as traders continued to price in further interest rate cuts by the Fed, especially against the Japanese Yen and the Swiss Franc. So called “carry trades” were being unwound, with the Aussie/Yen and Kiwi/Yen combos bearing the brunt of the punishment. The metals complex had mixed messages for traders, with the precious metals – especially Gold – performing well, as investors move some assets over as a hedge against the volatile stock and bond market activity seen during the past few weeks. Meanwhile, base metals were weaker, with Copper falling moderately on concerns that a slowdown in the U.S. economy may turn into a recession that would adversely affect industrial activity. Today’s figures put an even bigger spotlight on the Fed’s next meeting scheduled for September 18th, as traders and economists look at not only what the Fed will do with interest rates, but how it views the overall health of the U.S. economy given recent economic data and events.

Mike Zarembski, Senior Commodity Analyst

Both bulls and bears left the party early today as the markets went for a great ride, but without much to show for it in the end. The Dow ended the day 9 points in positive territory, while the S&P closed down 2 points and the NASDAQ lost 6. Bonds continued their rally today with another gain, as the 10-year Note closed with a yield of 4.75% and the 30-year Note ended at 5%.

There wasn’t much news to start the trading week, which may help explain the relatively flat close. Traders seem to be reserving most of their expectations for the upcoming Federal Reserve meeting a week from tomorrow, when many assume the Fed will lower rates. However, this is a rate cut that may already be priced into the market, meaning it may not help as much as people think. Later this week, we look forward to Initial Claims and Retail Sales figures.

Overseas, the Nikkei dropped 2.22% and the Hang Seng was flat in the last trading session.

Mike Tosaw, Director of Education

Economic Data Scheduled for Tuesday, September 11, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: Trade Balance for July (Consensus -59.0 billion)

Great Britain
3:30 AM: Total Trade Balance for July (Consensus -37.0 billion)

Canada
7:30 AM: New Housing Prices for July (YoY) (Previous 7.8%)

European Union
None

Japan
6:50 PM: Current Accounts for August (Consensus 1900 billion)

US stock markets staged a big rally today, with the Dow adding 180 points, the S&P gaining 19, and the NASDAQ closing 38 points in the green. Although there were no big news announcements on the economic calendar (Trade Balance came in close to expectations), the market rallied nonetheless.

Bond yields were down again today, with the 10-year Note finishing at 4.36%. The big talk once again for both stocks and bonds is the magical date of September 18th when the Fed meets to discuss interest rates and the overall health of the U.S. economy.

Overseas, the Nikkei added .71% while the Hang Seng lost .2%.

Mike Tosaw, Director of Education

Economic Data Scheduled for Wednesday, September 12, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: USDA Crop Production and Supply/Demand Report
9:30 AM: EIA Energy Stocks Report

Great Britain
3:30 AM: Average Earnings Excluding Bonus for July (Consensus 3.5%)

Canada
None

European Union
4:00 AM: Industrial Production for July (MoM) (Consensus 0.2%)

Japan
12:00 AM: Household Consumer Confidence for August (Consensus 44.0)

There wasn’t a lot of news in the U.S. markets today, and in the end there wasn’t a whole lot of movement either. The Dow came out ahead by 16 points, the S&P finished up a fraction of a point, and the NASDAQ lost 5 on the day. Crude Oil drew much of the attention today with a 1.8% increase, actually going above the $80 per barrel level for a time.

The bond markets finished ahead on the day, with the 10-year Note closing with a 4.4% yield, while the 30-year Bond ended the day at 4.68%. The Federal Reserve meeting next Tuesday continues to be the focal point for forward-looking traders.

In Asia, the Nikkei closed down .5% and the Hang Seng finished its last session ahead by 1.5%.

Mike Tosaw, Director of Education

Economic Data Scheduled for Thursday, September 13, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: Initial Jobless Claims for wk ending Sept. 8th (Consensus 325K)
1:00 PM: Treasury Budget (Consensus -85.0 Billion)

Great Britain
None

Canada
None

European Union
None

Japan
None

Equity futures rose in the U.S. and Europe this afternoon on speculation that the recent worldwide credit crunch may be nearing an end. The Federal Reserve announced that the U.S. commercial paper market improved somewhat last week, bolstering investors’ confidence. The U.S. Dollar rose versus the Euro and Yen and U.S. Treasury futures declined, as flight-to-quality buying ebbed.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Friday, September 14, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: Retail Sales for August (Consensus 0.5%)
8:15 AM: Industrial Production for August (Consensus 0.3%)
8:15 AM: Capacity Utilization for August (Consensus 82.0%)
9:00 AM: Business Inventories for July (Consensus 0.3%)
9:00 AM: University of Michigan Sentiment Index for September (Consensus 83.5)

Great Britain
None

Canada
None

European Union
1:00 AM: Consumer Price Index for August (MoM) (Consensus 0.1%)
1:00 AM: (Germany) Consumer Price Index for August (MoM) (Consensus-0.1%)

Japan
None

Soybeans: Freezing temperatures in parts of the northern Midwest over the weekend have bean traders buzzing, as concerns mount that crop damage may have occurred in parts of Iowa, Minnesota, and Wisconsin. This news helped send November Soybeans to highs not seen in three years, with prices moving closer to the psychologically important $10 per bushel level. At the end of the overnight session, November Soybeans are trading at $9.71 ¼, up 16 ½ cents.

Stock Index futures: U.S. equity index futures have started the week on a down note following losses in Europe, as a major U.K. mortgage lender, Northern Rock Plc, fell to seven-year lows after customers continued to withdraw savings following a bailout by the Bank of England last week. This has sparked fears that the recent credit crunch has not been resolved and may spread throughout the world. In early trade, December S&P 500 futures are trading at 1476.00, down 9.00.

Coffee: Following a move to 9-year highs by the Robusta contract in London, Arabica Coffee futures in New York rose to one-month highs in early trade, as traders fear tight supplies ahead of the harvest in Vietnam – the world’s largest producer of Robusta Coffee – starting in November. High Robusta prices have caused some Coffee roasters to switch to using more Arabica beans in their blends. In early trade, December Coffee is trading at 122.75, up 1.85.

Mike Zarembski, Senior Commodity Analyst

The markets went down today – not by a lot, mind you, but they still closed lower than when they started, as the Dow lost 39, the S&P dropped 7, and the NASDAQ gave up 20. On a day when meaningful news was in short supply, the bears modestly won the battle.

Over in the bond pits, yields decreased, with the 10-year Note finishing the day with a 4.48% yield. The 30-year Bond closed with a 4.72% yield, while the 2-year ended with a 4.08% rate.

PPI would normally be the tomorrow’s marquee release, but most traders on this particular Tuesday will be devoting more attention to the Federal Reserve meeting. Current debate is vacillating between a .25% and a .5% rate cut – if the Fed happens to either pause or even raise rates, it will come as a huge surprise to the markets.

Overseas, the Nikkei added 1.94% and the Hang Seng lost 1.2% in their last respective trading sessions.

Mike Tosaw, Director of Education

Economic Data Scheduled for Tuesday, September 18, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: PPI for August (Consensus -0.3%. Core 0.1%)
8:00 AM: Net Foreign Purchases for July (Prior 120.9 Billion)
1:15 PM: FOMC Policy Statement

Great Britain
3:30 AM: Consumer Price Index for August (Consensus 0.4%)
3:30 AM: Retail Price Index for August (Consensus 0.5%)

Canada
None

European Union
4:00 AM: (Germany) ZEW Survey-Economic Sentiment (Sep) (Consensus-17.0)

Japan
None

Stock Index futures: Indexes in both Europe and the U.S. are little changed from yesterday’s close, as traders await what might be one of the most widely anticipated FOMC meetings in years. The slump in the U.S. housing market coupled with the recent liquidity crisis looks to have forced the Fed’s hand into lowering the Fed Funds rate by 25 basis points, according to survey of economists by Bloomberg News. However, the statement released after the rate announcement will be closely analyzed by the markets for any signs that further rate cuts are down the line, or if the Fed hopes to jawbone the market into believing it is ready to tackle further weakness in the economy if necessary without losing its grip on controlling inflation. In early trade, the December e-mini S&P 500 futures are trading at 1478.75, up 1.75.

Wheat: Chicago Wheat futures continue to rebound from last week’s sharp price correction after hitting all-time highs on Wednesday. The Australian Bureau of Agricultural and Resources Economics lowered its estimate for the country’s Wheat production to 15.5 million metric tons – down sharply from its previous estimate of 22.5 million tons. Australia is the third largest Wheat exporter behind the U.S. and Canada. South Korea bought 47,700 metric tons of U.S. Wheat today, with Taiwan and Japan also expected to tender for U.S. Wheat this week. Both Pakistan and Turkey may each need to import up to 1 million metric tons of Wheat this season to help replenish stockpiles. At the end of the overnight session, December Wheat is trading at $8.87, up 12 cents.

Crude Oil: Lead month October Crude Oil rose above $81 per barrel in overnight trade, as traders anticipate another drawdown in U.S. Crude inventories last week with rising demand continuing to overwhelm supplies. In tomorrow’s EIA energy stocks report, traders are anticipating another 2 million barrel draw in Oil stocks, which will be the 10th drawdown in 11 weeks should it come to pass. In early trade, October Crude Oil is trading at $80.91, up $0.34.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Tuesday, September 18, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: PPI for August (Consensus -0.3%. Core 0.1%)
8:00 AM: Net Foreign Purchases for July (Prior 120.9 Billion)
1:15 PM: FOMC Policy Statement

It was a wild afternoon for futures traders, especially after the Federal Reserve surprised some traders by lowering the Fed Funds rate by an aggressive 50 basis points to 4.75%. The FOMC vote was a unanimous 10-0 for the rate cut. The Fed also lowered the Discount Rate by 50 basis points to 5.25% – the second such cut in a month’s time. The news sparked an aggressive rally in Stock Index futures, with e-mini S&P 500 futures up well over 30 points at the peak. Bulls were also stampeding over to the metals sector, with December Gold trading over $730 per ounce, and December Silver leaping by nearly 25 cents. The energy complex was also sharply higher, with October Crude Oil futures moving above the $82.00 level for the first time. However, the cut was bad news for the U.S. Dollar, with the December Dollar index falling over 50 ticks at one point, as traders punished the greenback and the Japanese Yen. Long-term interest rate futures also posted sharp losses this afternoon. Traders now expect further interest rate cuts are in the offing, with March 2008 Eurodollar futures pricing in a 100% chance of a 4.5% Fed Funds rate by the first quarter of 2008, and an 88% chance of a 4.25% rate.

Mike Zarembski, Senior Commodity Analyst

Stock Index futures: Equity index bulls continue to celebrate into the early morning trade, after the Federal Reserve started the party rolling by cutting the Fed Funds and Discount rates by 50 basis points each. This sparked a tremendous rally in the stock indexes, as traders believe that the rate cuts will be enough to stimulate growth in the U.S. despite the recent housing slump. Traders will now turn their focus to this morning’s economic reports, with the Labor Department scheduled to release its report on consumer prices in August. Traders are looking for no change in the headline figure, but a moderate 0.2% rise in the so-called “core” rate, which excludes food and energy prices. Also out this morning is the report on housing starts and building permits for August, with economists expecting a decrease in housing starts to an annual rate of 1.35 million, which would be the lowest number in twelve years. In early trade, December e-mini S&P 500 futures are trading at 1540.00, up 7.00

Crude Oil: October Crude Oil futures continue to hover above $82 a barrel in early morning trade, as yesterday’s surprisingly aggressive Federal Reserve rate cut is expected to help stimulate the U.S. economy and keep energy consumption strong. Traders also are looking for another decline in Crude Oil inventories last week in today’s EIA energy stocks report – current estimates are for a decline of between 1.5 and 2 million barrels. In early trade, October Crude Oil is trading at $82.14, up $0.63.

Ten-year Note futures: Medium- and long-term Treasury futures are moderately lower in early morning trade, as traders start to sell longer-term government debt after yesterday’s Fed rate cut generates concern that inflation will start to heat up. One need only look at the continued weakness in the U.S. Dollar and soaring Gold and Crude Oil prices to see the market pricing in accelerating inflation expectations. Cash yields on the Ten-year Note rose by 5 basis points to 4.52% this morning in London. In early morning trade, December Ten-year Notes were trading at 109-225, down 0-050.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Wednesday, September 19, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: CPI for August (Consensus 0.0%. Core 0.2%)
7:30 AM: Housing Starts for August (Consensus 1345K)
7:30 AM: Building Permits for August (Consensus 1350k)
9:30 AM: EIA weekly Energy Stocks Report – week ending 9/14

Energy futures: November Crude Oil rebounded above the $80 per barrel level in the early going as traders gear up for another decline in U.S. Crude inventories. This morning’s weekly EIA energy stocks report is expected to show Oil supplies fell by between 1.8 and 2.2 million barrels last week. Traders will also be watching the inventory figures for Cushing, Oklahoma – the delivery point for NYMEX Crude Oil futures. Recent inventory declines and solid demand are responsible for the continued backwardation of the WTI Oil market – wherein near month contracts trade at a premium to deferred month contracts. Backwardation signals that users are willing to pay a premium for immediate supplies. Gasoline inventories are expected to show a moderate increase of between 100,000 and 300,000 barrels. Distillates – which include Heating Oil – are expected to show a 1 million barrel gain. In early trade, November Crude Oil is trading at $80.11, up $0.58.

Coffee: Profit-taking selling hit the December Arabica Coffee futures market in early trade, after an 8-month high was reached yesterday. Dry weather in the main Coffee growing regions of Brazil has been chief among the reasons for the recent price rise. However, origin sellers came out on yesterday’s rally, leading weak bulls to start to book profits on their long positions. Brazil’s Coffee exports have started to increase, with the Green Coffee Exporters Council reporting exports totaling 1.214 million bags so far this month, up from 915,873 bags last month. In early trade, December Coffee was trading at 129.95, down 3.15.

Dollar Index: Short covering buying emerged in December Dollar Index futures, as bears sought to book profits ahead of this morning’s release of U.S. durable goods orders for August. The consensus is for a decline of 3.5% last month, as buyers of big-ticket items held back their purchases due to uncertainly in the U.S. economy. In early trade, the December Dollar Index was trading at 78.450, up 0.255,

Mike Zarembski, Senior Commodity Analyst

That may be the mentality of stock index futures traders, as Dow Jones futures surged to an all-time high yesterday afternoon. The rally in the U.S. stock market comes despite predictions from leading experts that the chances of the U.S falling into a recession remain 50/50, and talk from leading fund managers that the Fed has not yet restored confidence in the U.S. credit markets. The U.S. housing market remains mired in a slump, with a report out this morning expecting to show that pending home sales fell to their lowest levels since the index has been calculated starting in 2001. So why are investors enamored with stocks again? One possible explanation might be the changing focus by the Federal Reserve from inflation containment to general prevention of an economic slowdown. The 50 basis point rate cut in September signaled that the Fed is willing to tolerate some moderate increases in inflation in order to prevent a recession in the U.S. This gave traders the confidence to move assets back into the stock market –especially multi-national blue chips – on the belief that the Fed will continue with its “accommodative” stance and keep interest rates low for the foreseeable future. Whether this tactic works and prevents a rapid slowdown of the U.S. economy or just fuels another speculative “bubble” in securities is still unknown, but for stock index bulls it’s “let the good times roll!”

Looking at the daily chart for December mini-Dow futures, we notice traders still in a buying mood after yesterday’s record-setting session. Prices are well above all the major moving averages, and momentum remains strong. The 14-day RSI is now in moderately overbought territory, with a current reading of 81.67. Yesterday’s highs of 14198 will act as resistance, with support found at 13782. In early trade, December mini-Dow Jones futures are trading at 14166, up 9.

Mike Zarembski, Senior Commodity Analyst

Precious Metals: Sharp declines are being seen in the precious metals complex this morning, as a rally in the U.S. Dollar and lower oil prices are slowing the voracious investor appetite for Gold and its brethren. Aggressive speculator selling was seen in Tokyo, with the Tokyo Commodity Exchange (TOCOM) Platinum and Gold contracts showing hefty losses at the close of trading. In early New York trade, December Gold is trading at $738.20, down $15.90, and January Platinum is trading at $1361.00, down $40.20.

Crude Oil: NYMEX light sweet Crude Oil futures continue their sell-off after Friday’s technical reversal, falling below the $80 per barrel mark with traders contemplating lower Oil demand from refineries as profit margins erode. The price of refined products such as Gasoline and Heating Oil have not kept pace with the rising price of Crude, which has cut the margins refiners were getting for processing Oil into energy products. In addition, a stronger greenback the past two days may start to crimp demand for commodities priced in Dollars from foreign buyers. In early trade, November Crude Oil is trading at $79.19, down $0.99.

Dow Jones Index futures: After a record-setting day on Monday, Dow futures continue to climb as traders move back into equities, believing that the worst of the subprime mortgage crisis may be over. The early morning rally comes despite expectations that this morning’s release of the National Association of Realtors' index will show a drop in August in the number of signed contracts to buy previously owned homes. In early trade, December mini-Dow futures are trading at 14182, up 25.

Mike Zarembski, Senior Commodity Analyst

S&P 500 futures: There is a slight bid on e-mini S&P 500 futures this morning, as traders gear up for a rebound in non-farm payrolls in September. Expectations are for payrolls to have increased by 100,000 jobs in September, a sharp rebound from the loss of 4,000 jobs in August. However, many believe that an increase in government jobs will account for the bulk of any rise, as private sector job growth lags behind. In early trade, December e-mini S&P 500 futures are trading at 1556.25, up 4.00.

Dollar Index: December Dollar index futures are trading moderately lower, as traders look for the unemployment rate to rise by 0.1% to 4.7% in today’s jobs report. Traders expect the manufacturing, construction, and financial services sectors to be a drag on employment, keeping alive the possibility of further interest rates cuts in the remaining weeks of 2007. In early trade, December Dollar Index futures are trading at 78.280, down 0.100.

Treasury futures: After closing near the highs of the session yesterday, Treasury futures are moderately lower as traders await the non-farm payrolls report. Average hourly earnings are expected to increase by a moderate 0.3% – the consensus figure for almost every month. If the report shows a bigger increase in wages, Treasuries may be on the defensive as wage inflation creeps back into the spotlight. In early trade, December Ten-year Note futures are trading at 109-180, down 0-02.

Mike Zarembski, Senior Commodity Analyst

Copper: After rising 2.4% in London trading last week, Copper futures are giving back those gains in early trade, with traders fearing that Chinese demand will dry up in light of high prices. However, Copper could receive a boost later in the week if a strike by workers at Southern Copper Corp. in Peru continues into its second week. In early trade, December Copper is trading at 361.55, down 10.90.

Wheat: Chicago Wheat futures continue their decline from all-time high prices, with traders looking for sharply increased plantings this fall as producers take advantage of “attractive” new-crop Wheat prices. Wheat futures in Paris were down as much as 4% in late morning trade, adding to the weakness in the Chicago market. At the end of the overnight session, December Wheat was trading at $8.76 ¼, down 13 ¾ cents.

Dollar Index: The greenback is higher versus the Euro and Yen in early morning dealings, as traders expect European finance ministers to discuss ways to halt the Euro’s steep climb against the U.S. Dollar during the ECB meeting in Luxembourg today. In early trade, December Dollar Index futures are trading at 78.490, up 0.255.

Mike Zarembski, Senior Commodity Analyst

e-mini S&P – Comments by Ben Bernanke yesterday sucked the life out of equities in the early going and the market was unable to recover, with the S&P posting a second consecutive day of double-digit losses. The Fed Chairman warned investors that while the Central Bank’s rate cuts will help the economy, the Fed cannot “insulate investors from risk,” and noted that the slumping housing sector is likely to continue its drag on the economy. DataQuick Information Systems also released data showing that southern California home sales declined by nearly 30 percent in September, with the lowest number of units sold since the company began tracking housing data in 1988. The market will have more housing data to digest with today’s release of Housing Starts and Housing Permits at 7:30 AM CST. The figures are expected to come in at 1.285 and 1.3 million, respectively, both down from August. Also hitting the newswires, Citigroup, JPM and Bank of America announced that they have set up a rescue fund of sorts to bail out global credit markets at the behest of the Treasury Department. The fact that such a fund was set up probably adds more fear than comfort to the marketplace, at least among small investors. The spike in Crude Oil prices has also weighed on the market in the first two days of trading this week. Technically, the December e-mini continues to stay in an uptrend, but the close below the 18-day MA may signal that a near-term high is in place. The RSI and slow stochastics are both in neutral territory, which leaves room for more downside before the market ventures into oversold territory. Support comes in at 1530.00 and 1500.00, while resistance can be found at 1566.00 and all-time highs of 1586.75.

Wheat – Wheat finished lower overall, but did bounce back late in the day to avoid a technical breakdown. Lack of positive fundamental news seems to have taken the wind out of the Wheat market's sails, leading to this most recent wave of selling. Unwinding of long Wheat / short Corn spreads after Friday's supply and demand report and continued profit-taking helped push things to the downside, even as traders have largely shrugged off the news that heavy rains have set back early winter Wheat planting. December Wheat held above the critical 830 mark, which if violated would have confirmed a head and shoulder reversal pattern. Wheat found solid support around 815, which also happens to be in the neighborhood of the 50-day SMA, and the strong close formed a bullish hammer, which may give Wheat a slight bullish short-term technical bias. The momentum indicator showed almost no change from the previous trading session and registered a bearish -40.50. Both the RSI and slow stochastics are showing oversold levels, which could give the market a lift. Support comes in at 815 and the 38.2 Fibonacci retracement support of 765.25, while resistance can be found at recent highs of 890 and 911.25.

10-year Notes – The treasury markets have retreated since the surprise rate cut in August drove 10-year Note yields down to 21-month lows of 4.3 percent. Traders have been reluctant to jump into the treasuries despite credit fears and weakening economic indicators. This hesitance has been based on a number of wildcard factors, including inflation fears stoked by rising energy prices and the growing belief that the Fed may shift gears and raise rates. Last Friday's PPI data showed contained inflation, but traders are looking for follow-through in this morning's CPI release. The housing report may not make much of an impact on the market unless there is a huge surprise one way or the other. December Notes have weakened technically, with prices trading below the 50-day SMA for the over a week. A close below 108-00 may spark selling and trigger stops. Support can be found at 108-00 and 106-13, while resistance comes in at 109-06.5 and 109-30.

Dow Jones – Stocks mounted a comeback in late trading yesterday, as optimistic traders hoped that the Fed would once again slash rates at the end of the month. Housing starts were at the lowest levels in 14 years, and the CPI report showed that inflation is tame for the time being. Meanwhile, S&P also downgraded a host of sub-prime debt last year. The release of the Fed's Beige Book – which showed slower growth in the 3rd and 4th quarters – really sparked the equity markets late in the day. All of this unimpressive economic data leads many to believe that the Fed will take action, especially given Ben Bernanke's recent comments about the housing sector being a drag on the economy and the inability of the Fed to insulate investors from risk. The late rally stopped what could have been a technical breakdown on the December Mini-Dow chart yesterday, as the market was able to hold above support at 13830. Momentum is showing positive divergence from RSI, suggesting a possible recovery in the coming days. The RSI is showing oversold levels in early trading, which may be a prelude for a Friday bounce. Traders will keep an eye on the 9 and 18-day SMA, which are very close to crossing on the downside. Support comes in at 13830 and 13550, while resistance can be found at 14085 and 14237.

Bonds – The Bond market was strong yesterday and in overnight trading, as disappointing economic data keeps rolling in. Bonds have not been the defensive play recently because of a weak greenback and investors choosing to look elsewhere – mainly commodities – to address their inflation concerns. The weak Dollar has played a key role in all of this, with large treasury market players China and Japan seeking alternatives. The belief that a rate cut is coming and fresh sub-prime fears in the minds of fixed income traders have boosted December Bond prices by more than a point and a half over the last two days. December Bonds also have some positive technical factors going for them. The slow stochastic indicator showed an upward crossover, and the momentum indicator has outpaced the RSI. Also, the market looks as though it may be confirming a breakout from the wedge pattern it has been forming since the beginning of September, which could push prices above recent highs of 114-08. Support comes in at 111-05 and 110-00, while resistance comes in at 112-10 and 113-00.

Coffee – Coffee is trading lower overnight on weak technicals and ample rains in Brazil. Brazil is forecast to receive light to moderate rainfall, which will aid budding in the new crop. Forecasts for two cold fronts expected to hit the growing region within the next week and a half helped to slow the price decline yesterday. With neither front expected to be particularly severe, traders have opted to take profits and adopt the wait and see approach before reacting. Technically, Coffee remains weak and is currently trading below the 128.00 support area. Traders are paying attention to the key 125.00 support area which if violated could send prices below 120.00, possibly toward the mid-teens. Resistance can be found at 133.25 and 138.50. Momentum stands at a weak -1.80 and the RSI is a neutral 36 percent coming into trading. The RSI has dipped into oversold territory, suggesting that the decline may stall or even get a bounce at 125.00.

S&P – The stock market commemorated the 20th anniversary of the Black Monday meltdown with a huge sell-off on Friday. The lingering credit crunch has hit the markets especially hard over the past week, stoking fears that the economy may contract even if the Fed continues cutting rates. Many traders had been tolerating the disappointing housing numbers, figuring that corporate bottom lines might at least benefit. But this view has largely changed in the wake of Bank of America's disappointing earnings release, which demonstrated yet again that subprime debt worries are very much in play. The subprime worries have made their way around the globe, with international investors scooping up distressed debt and the European and Asian markets bracing for the oncoming pinch. The bludgeoning of the market continues this morning, with the December e-mini S&P dropping over 12 points after shedding over 40 on Friday. American Express and Countrywide – both with heavy debt exposure – are set to release earnings today, and traders anticipating bad numbers have been dumping shares of both stocks in the early going. The December e-mini dropped below the 50-day moving average on Friday as the market closed on support in th