T-bonds Hit Bottom Before FOMC Meeting
T-bonds [USH0>USH0] tumbled for a sixth consecutive day, matching a contract low one day prior to the Federal Open Market Committee’s (FOMC) final meeting of the millennium.
Although the Fed’s interest rate-voting body is not expected to raise rates, the market is concerned that historically low unemployment rates, strong retail sales, soaring equity prices and rising oil prices could prompt the FOMC to increase its outlook on rate hikes to a tightening bias. March T-bonds closed 18/32 lower at 91 8/32.
Stock index futures closed mixed with blue chips taking it on the chin while tech rallied to new highs. March Dow futures [DJH0>DJH0] signaled they could reverse by registering on the Turtle Soup Plus One Sell List, and closed down 171.0 at 11,256.0. From the Momentum-5 List,
NASDAQ 100 futures [NDH0>NDH0] closed at a new high, gaining 34.00 to 3448.00 while, S&P futures [SPH0>SPH0] fell 9.50 to 1434.80.
March dollar index futures [DXH0>DXH0] fell back along with blue chips and bonds, sliding .35 to 101.51. The Japanese yen [JYH0>JYH0], Swiss franc [SFH0>SFH0] and British pound [BPH0>BPH0] all posted modest gains on the day.
Energies finished mixed: January crude [CLF0>CLF0] lost .20 to 26.54 while heating oil [HOF0>HOF0], another Momentum-5 List member, managed to gain .0034 to .6944.
Soybeans dominated the action in grain trading Monday. Dry weather in the world’s second largest exporting country, Brazil, sparked a rally in January soybeans [SF0>SF0], leaving the contract 6 1/4 higher at 458 1/2. January soybean oil [BOF0>BOF0] and
soymeal [SMF0>SMF0] also added 1.3% each.
Coffee [KCH0>KCH0] was also effected by the dry weather in Brazil as well as speculation that an official government report (slated for release within the next two days) will show a weak crop: The March contract gained 2.90 to 135.30.