By Mark O’Brien, Senior Broker
General:
Keep an eye out for commodity futures broadly, for bullish moves. Geopolitical tensions and the Iranian missile strike on Israel are dominating the commodity news so far this week. The most visible reaction was seen in crude oil prices, which pushed higher as fears of supply disruptions escalated.
In other news causing unease to a range of commodities futures, the first strike by the International Longshoremen’s Association since 1977 is potentially closing ports from Houston to Boston and once again threatening supply chains.
Another key development adding some fundamental bullishness to commodities: China’s largest stimulus package since the pandemic, with the promise of more to come. Last week, China unleashed a package of monetary and fiscal easing measures, launching China’s benchmark CSI 300 Index 27% from its September lows into fresh bull market territory. These aggressive actions are already reverberating through global commodity markets. Iron ore futures have surged over 20% in China.
Metals:
After closing above $2,700 per ounce for the first time – an all-time high – last Thursday, December gold eased to $2,677 per ounce at the time of writing. Overall, gold’s near 7-month price increase reflects traders’ bullishness amid the current geopolitical tensions and the prospect of more interest rate cuts in the U.S.
Energies:
Despite the recent reaction by crude oil related to the aforementioned geopolitical tensions, in a monthly Reuters poll released Monday, 41 analysts and economists cut their 2024 oil price forecasts for a fifth consecutive month. Weaker demand and uncertainty over OPEC’s plans were cited. In April, driven by Middle East tensions and OPEC+ supply cuts, oil prices surged past $90 a barrel. Since then, declining demand trends have led to an supply overhang and crude oil has reversed course, dipping below $70 per barrel this month.
Important heads up:
it’s that time of the month again: we’re a couple of days from when the Labor Dept. releases its monthly Non-farm payrolls report. It’s widely considered to be one of the most important and influential measures of the U.S. economy and the report is released at 7:30 A.M., Central Time on the first Friday of the month.
To review, the Labor Dept.’s Bureau of Labor Statistics surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual work sites. The report excludes farm workers, private household employees, domestic household workers and non-profit organization employees. The report also includes other detailed industry data including the overall unemployment rate as a percentage of the total labor force that is unemployed but actively seeking work, wages, wage growth and average workday hours.
Side note:
Power is only one of the worries for the survivors of Hurricane Helene – in so many of the Appalachian towns and other hard-hit areas. Those in the hurricane’s wake are struggling to access clean water, safe shelter, clear roads, gasoline and food, among other necessities. With that said, as of Wednesday morning, more than 1.2 million outages remain across the region.
Here are some of the latest figures on the number of reported outages:
Florida 42,321
Virginia 44,850
North Carolina 347,118
Georgia 363,340
South Carolina: 491,105
Daily Levels for October 3, 2024
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