Newsletter - August 2021
Now Trading! Micro WTI Crude Oil Futures (MCL)
Introducing Micro WTI Crude Oil (MCL) futures, providing traders of all sizes a smaller, more precise instrument for managing crude oil price exposure. At 1/10 the size of the WTI futures contract, the Micro WTI Crude Oil futures contract offers the same transparency & price discovery of larger WTI futures with smaller margin requirements.

Day Trading Margins for Micro WTI Crude Oil futures are $100* /contract
System of the Month: Swing18 ACO _ Wheat ZW
Many traders choose to diversify their portfolios with algorithmic trading systems. The following system has been selected as the broker's choice for this month.
REQUIRED CAPITAL: $3,100*
PRODUCT: Wheat Future
SYSTEM TYPE: Swing
COST: $90 / month
COMMISSION: $12.50 per side 
The performance shown above is hypothetical in that the chart represents returns in a model account. The model account rises or falls by the average single contract profit and loss achieved by clients trading actual money pursuant to the listed system’s trading signals on the appropriate dates (client fills), or if no actual client profit or loss available – by the hypothetical single contract profit and loss of trades generated by the system’s trading signals on that day in real time (real‐time) less slippage, or if no real time profit or loss available – by the hypothetical single contract profit and loss of trades generated by running the system logic backwards on backadjusted data.   
The Global Update Blog
Trading Crude Oil Futures – Basics on the Legacy Lifeblood of Global Industry
Crude oil is arguably the most liquidly-traded physical commodity market & it has historically generated the most striking economic headlines, as it’s closely tied in with the economy, geopolitics, weather...

Are We Facing Another Debt Ceiling Debacle?
Either the federal debt ceiling is raised to accommodate more government debt (and spending), or the debt ceiling is enforced, limiting the amount that the government can borrow, potentially...

Upcoming Government Reports & Holidays
Aug 02
Aug 03
Aug 05
Aug 06
Aug 06
Aug 11
Aug 11
Aug 12
Aug 17
Aug 17
Aug 18
Aug 19
Aug 24
Aug 24
Aug 25
Aug 27
CONSTRUCTION SPENDING REPORT
MANUFACTURERS' SHIPMENTS, INVENTORIES & ORDERS - FULL REPORT
US INTERNATIONAL TRADE IN GOODS & SERVICES REPORT
MONTHLY WHOLESALE TRADE: SALES & INVENTORIES
EMPLOYMENT SITUATION REPORT
BUSINESS FORMATION STATISTICS
CONSUMER PRICE INDEX REPORT
PRODUCER PRICE INDEX REPORT
ADVANCE MONTHLY SALES FOR RETAIL & FOOD SERVICES REPORT
MANUFACTURING AND TRADE: INVENTORIES & SALES REPORT
NEW RESIDENTIAL CONSTRUCTION REPORT
ADVANCE SERVICES REPORT
NEW RESIDENTIAL SALES REPORT
PRELIMINARY US IMPORTS FOR CONSUMPTION OF STEEL PRODUCTS
ADVANCE REPORT ON DURABLE GOODS - MANUFACTURERS' SHIPMENTS...
ADVANCE ECONOMIC INDICATORS REPORT
Key Events That Moved the Market in July 2021
The following is a review of US and world events from the last month. Please be advised that this content is based upon the opinions and research of GFF Brokers and its staff and should not be treated as trade recommendations.

S&P 500 Index (SPX) - Daily Chart - July 1 - 28, 2021 (Source: Tradingview)

July 1
  • Stocks edged higher on the first day of the new month with the S&P 500 logging in another record close.
  • July is typically a strong month for stocks with none of the averages seeing a down-July since 2014.
  • The June ADP non-farm employment report came in at 692,000, besting analyst forecasts of only 600,000.
  • Although analysts expected pending home sales in May to decline by -0.8%, it got a rude inflation awakening when sales jumped to 8.0%. 

July 2
  • Coming off yesterday’s boost, the broader market is off to a strong start as the S&P 500 and Nasdaq hit record highs again following a strong jobs number.
  • The US economy added 850,000 jobs last month, well above estimates of 706,000.
  • Meanwhile, the unemployment rate ticked up to 5.9%--both are essentially a “goldilocks” level for investors.

July 5
  • Markets closed for US Independence Day holiday

July 6
  • A mild hangover for stocks as evidence of decelerating growth tripped up the market’s overextended win streak.
  • The June ISM Purchasing Managers' Index (PMI) shows healthy levels of growth in the non-manufacturing sector, coming in at 60.1, though well below economist estimates of 63.5.

July 7
  • The broader market saw another push toward record levels as bond yields declined further toward a five-month low.
  • 10-year Treasury yields slid to 1.31%, as inflationary fears ease and the economy settles into less-blistering growth.
  • Investors aren’t taking the drop in yields as a sign of economic weakness just yet, allowing sectors like industrials and financials to hang on to most of their big gains since last Fall.
  • The FOMC minutes revealed a lively debate on when to end bond purchases, but overall the Fed emphasized patience until more data on economic growth performance proves compelling enough to prompt changes in monetary policy.

July 8
  • Concerns on global growth finally reached the indices as the market pulled back following a raging rally in Treasury bonds.
  • Reports of increasing covid cases abroad, particularly in Japan with regard to the upcoming Olympics, provided a negative overlay on the markets in general with uncertainty thrust to the fore.
  • Initial jobless claims for the previous week showed 23,000 more job losses than expected; 373,000 claims were filed versus the expected figure of 350,000.

July 9
  • Another demonstration of Wall Street resilience as stock prices and bond yields rebounded strongly from yesterday’s sudden drop.
  • The broader market managed to end the week with a slight gain.
  • So far, the market is perched high for the coming week’s economic news which includes a key inflation report and testimony from Fed chief Jerome Powell.

July 12
  • Stocks kicked off the trading week with record gains.
  • The Dow managed to rebound from an early triple-digit loss to close above 35,000 for the first time in its history.
  • Financials led the charge as the best performing sector kicking off the earnings season which starts tomorrow.
  • Revenue growth from loans are the main focus for banks, as the largest on Wall Street have emerged with strong results from stress tests but face the headwinds of a low-interest environment which may affect net income growth.

July 13
  • Stocks took a turn lower pulling back from Monday’s levels due to a red-hot inflationary reading which added a dose of nervousness to the markets.
  • Core CPI in June saw an astounding jump to 0.9% topping expectations of 0.4%. 
  • The pace of the inflationary surges--its fastest in 13 years--seemed to have shocked even the Federal Reserve itself, as the central banks expected a much more muted rise in prices.
  • Earnings season kicked off with banks, with shares of JP Morgan and Goldman Sachs declining even in the face of big earnings beats.

July 14
  • Stocks edged higher with the S&P 500 managing to close at a new milestone at 4,374.
  • The June Producer Price Index which measures the change in input costs of manufacturers came in stunningly high with a 1.0% increase, far above the anticipated number of 0.6%.
  • Although today’s red-hot PPI reading comes atop yesterday’s hot CPI reading, investors seem generally unfazed by the inflationary surge.
  • Jerome Powell testified in Washington, reassuring that inflation is expected to remain high in the coming months before declining to more moderate levels. 
  • He reiterated his view that the Fed sees no path to hiking interest rates anytime soon.
  • The market may be rising due to the belief that companies still have pricing power, or the ability to raise prices, preserving their ability to produce or maintain healthy revenue levels.
  • It’s when, amid high inflation, companies are no longer able to raise prices that the markets tend to react negatively.

July 15
  • Stocks stumbled as declining bond yields keep economic slowdown worries in focus.
  • New jobless claims came right at consensus levels with 360,000 new claims filed last week.
  • The Philadelphia manufacturing index showed some weakness, coming in at 21.9 when 28.0 was expected.

July 16
  • Stocks sold off into the close with all three major US indices snapping three-week win streaks.
  • Overall, markets appear to be grappling with a negative trifecta of inflation fears, surging delta variant cases, and lingering worries about high market valuations.
  • Retail sales came strong in June, increasing month over month by 0.6% upsetting expectations of a decline to -0.4%.

July 19
  • An ugly way to start the week, the Dow plunged nearly 900 points before recovering and ending down 725.
  • Covid fears may play a big part in the market’s churning, as post-pandemic recovery in the markets is taking place despite the fact that the virus hasn’t really gone away, but rather, mutated into a potentially stronger variant; hence, the markets are playing defense.
  • Covid cases are now rising 66% week over week.

July 20
  • Stocks staged a comeback following yesterday's plunge and virtually wiping out all of yesterday’s losses.
  • Traders on Wall Street are pointing to a number of factors that might have prompted today’s reversal, from investors buying the dips to the general sentiment that certain stocks may have been oversold, as yesterday’s leaders in decline became today’s rally leaders.

July 21
  • The rebound rally continues with chipmakers, seen as valuation laggards, leading the charge in a market of seemingly lofty valuations.
  • Among the 72 S&P 500 companies that have reported earnings so far, 89% have beaten expectations with an average revenue beat of 19%.

July 22
  • The markets took a breather today from a week of wild swings.
  • Once again, jobless claims came in significantly worse than expected as 419,000 new claims were filed last week, upsetting analyst expectations of 350,000 new claims.
  • Existing home sales slumped slightly with 5.86 million homes being sold amid expectations of 5.90 million in home sales.

July 23
  • Wall Street started the week on a down note but ended the week on a record day with all three indices notching higher valuations.
  • Next week brings the busiest week of earnings season as a third of the S&P 500 reports, including big tech names like Alphabet, Amazon, Facebook, and Microsoft, all reporting along with a slew of other big names like Tesla and Ford.

July 26
  • It was a choppy road but all three major US indices managed to reach record highs again.
  • All three indices are riding 5-day win streaks which for the Nasdaq hasn’t happened since January. 
  • And with one more week until the end of July, the S&P 500 is heading toward its sixth straight month of gains.
  • New home sales continue to exhibit the declining trend characteristic of the overall housing market, as 676,000 sales underperform expectations of 800,000--a sign that the red-hot housing boom may be cooling off.

July 27
  • Stocks drifted lower today snapping indices’ 5-day winning streaks.
  • A number of tech stocks like Alphabet declined ahead of their after-market earnings reports on concerns about their built-up expectations.

July 28
  • Markets remain mixed as the Federal Reserve concluded its two-day meeting to give the markets more of the same--continued easy money policies and no hint of rate hikes in the near future.
  • Fed chair Jerome Powell reiterated that with the delta variant spreading, the economy still has a substantial way to go before the Fed sees enough progress to pull back on its low interest rate stance. 

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*Day Trading Margins valid for select FCMs only (including Ironbeam & Phillip Capital). Higher day trading margins may apply for accounts held with other FCMs.

*Details regarding Swing18 ACO _ Wheat ZW: Please be aware that the suggested capital to trade this system is $30,000. Please speak to your broker for more information about this trading system. The returns for the systems listed are hypothetical in that they represent returns in a model account. The model account rises or falls by the average single contract profit and loss achieved by clients trading actual money pursuant to the listed system’s trading signals on the appropriate dates (client fills), or if no actual client profit or loss available – by the hypothetical single contract profit and loss of trades generated by the system’s trading signals on that day in real time (real‐time) less slippage, or if no real time profit or loss available – by the hypothetical single contract profit and loss of trades generated by running the system logic backwards on backadjusted data.
 
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
 
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

There is a substantial risk of loss in trading futures, options and forex. Past performance is not necessarily indicative of future results. Margins are subject to change at anytime without notice. All material herein was compiled from sources considered reliable. However, there is no expressed or implied warranty as to the accuracy or completeness of this material.