Daily Futures Commentary October 21, 2009

Wednesday, October 21, 2009

U.S. Equity Markets Lower as Traders Await More Earnings Reports

U.S. equity futures markets are trading lower as traders await key earnings reports from Well Fargo Bank and Morgan Stanley. Investors fear that these two banks will show losses from consumer and business loans like JP Morgan, Citigroup and Bank of America. Investors want to see improvements in earnings as well as stability in the bank balance sheets.

Treasury futures are called slightly lower this morning. Yesterday’s weaker than expected U.S. housing and PPI reports showed that the U.S. economy was still sluggish. This led to a sell-off in the equity markets and greater demand for lower yielding assets.

December Treasury Bond and Treasury Note traders also reacted to comments from San Francisco Federal Reserve President Janet Yellen. She stated that the Fed was not likely to tighten its monetary policy during short run. In addition, she said the Fed has not decided how to drain excess liquidity from the financial system.

The U.S. Dollar is trading mixed against most major currencies this morning ahead of the New York session opening. Traders will be taking early …
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