Stocks Index Futures Plunge
In one of their worst weeks on record, stock index futures tumbled in response to a premonitory speech by Fed Chairman Alan Greenspan and the strongest Producer Price Index (PPI) numbers in nine years.
In Greenspan’s speech last night, he said that stocks are riskier than cash or bonds and that banks should set aside additional reserves to “cover losses that will inevitably result” in market panics. December Dow futures [DJZ9>DJZ9] fell 275.0 to 10,060.0, S&P futures [SPZ9>SPZ9] dropped 32.70 to 1257.30 and NASDAQ 100 futures [NDZ9>NDZ9] fell 75.75 to 2418.75.
T-bonds [USZ9>USZ9] initially fell more than one-half point on the news but recovered, drifted higher and then rallied late in the day as traders sold equities and bought bonds in a flight-to-safety. Bond’s 6/100 Low Volatility reading was a tip-off that the contract could have a volatile day. The December contract finished at the top of its range, up 22/32 at 111 31/32.
Dollar index futures (from the Implosion-5 List) suffered from weaker equity prices and fell to new lows, trimming .95 to 96.72. Swiss francs [SFZ9>SFZ9] and December British pound [BPZ9>BPZ9], both from the
Momentum-5 List, shot to 50-day highs. The Japanese yen [JYZ9>JYZ9] also moved strongly against the dollar, gapping open and rallying to finish .0178 higher at .9578.
Energies gapped lower on the open, drifted higher during the session then shot up in the last hour to finish on the top of their ranges. November crude [CLX9>CLX9] rose .37 to 22.82, unleaded gas [HUX9>HUX9] zoomed up .0113 to .6355 and heating oil [HOX9>HOX9] added .0105 to .5956. Natural gas [NGX9>NGX9] also rose .141 to close at 2.975.
In the metals, December gold [GCZ9>GCZ9], from the Pullback Off Highs List, rallied off nine-day lows set yesterday, ending 2.2 higher at 316.4.
Once again, the grains traded in a relatively narrow range and finished mixed.
November soybeans [SX9>SX9] fell 4 3/4 to 492.
Although December lean hogs [LHZ9>LHZ9] finished slightly lower–down .300 at 47.100–pork contracts closed in a very bullish pattern just off contract highs. February pork bellies [PBG0>PBG0] gained 1.100 to 65.400. December live cattle [LCZ9>LCZ9] finished .150 lower at 68.725, near its 10-day low. This pattern suggests the contract will decline on Monday.
In the softs, December coffee [KCZ9>KCZ9], from the Momentum-5 List, gained 1.30 to 108.4. March sugar [SBH0>SBH0] fell .13 to 6.56 and November orange juice [OJX9>OJX9] fell 1.85 to 86.75.