Stuart Simonsen of Billings, MT is an entrepreneur and guest contributor on markets news. In the following article, Stuart Simonsen discusses the latest in futures investing, mixed European stock futures, Dow futures trading, gold movement and more.
Markets of all shapes and sizes are volatile in today’s uncertain geopolitical and economic times. But futures investing is truly seeing a mixed bag across the board.
From the mind-boggling European stock futures to gold experiencing backwardation to Dow futures trading higher alongside the Meta plunge, Stuart Simonsen says there’s a lot to catch up on over the last month or two.
Stu Simonsen Says European Stock Futures Are Mixed
Friday, November 25, 2022, saw the German-based DAX futures contract trade 0.1% higher, and the France-positioned CAC 40 futures also climbed by 0.1%. However, the United Kingdom’s FTSE 100 futures contract fell by 0.1%.
Published German GDP data for the third quarter saw growth in the zone’s biggest economy of 0.4%, representing a small but positive improvement from the year’s second quarter.
Annually speaking, Stuart Simonsen of Billings, MT explains that Germany’s economy grew by 1.2% in the third quarter, displaying a sharp slowdown from the 1.7% increase seen in the same quarter 12 months ago.
Growth was also seen in the GfK German consumer climate index, increasing to -40.2 from the previous month’s -41.9.
However, Friday promised muted activity levels since American investors closed early in response to the Thanksgiving holiday.
As for crude oil prices, Stu Simonsen reports that they crept higher on November 25. But investors expect them to still finish as another losing week amid concerns about the Russian oil price cap and the growing demand from China.
Officials from the Group of Seven countries and the European Union are discussing capping the seaborne oil from Russia at $65 to $70 per barrel. This range is higher than expected, mitigating fears that the country will cut oil exports to impede selling at losses.
On the flip side, US crude futures traded half a percent higher, showing a price of $78.34 per barrel. The Brent contract grew by 0.3%, too, ending at $85.57 a barrel.
Dow Futures Trade Higher Amid Meta Plunging by 19%
Stu Simonsen of Billings, MT reports that after the NASDAQ Composite and S&P 500 experienced three session win streaks in October, US stock futures were mixed.
By the evening of October 26, 2022, Dow Jones Futures increased by 0.5%, Nasdaq 100 Futures experienced a 0.3% growth, and S&P 500 Futures achieved a 0.4% growth.
As for extended deals, Meta Platforms Inc. dropped dramatically by 19% following the company’s quarter three EPS of $1.64, far mellow analysts’ expectations of $1.93.
According to the report, Meta’s revenue for the quarter at $27.71 billion. Again, this was lower than experts’ anticipations of $27.57 billion. Going forward, the company’s forecasted revenue for the year’s final quarter is between $30 billion and $32.5 billion.
But Meta wasn’t the only company to experience a considerable decline explains Stuart Simonsen of Billings, MT.
Align Technology Inc. decreased by 18.8% after publishing quarter three EPS of $1.36, $0.82 below analysts’ expectations. The company’s revenue for the quarter also disappointed experts at $890.3 million instead of the anticipated $973.03 million.
Gold Experiences Backwardation
November 18, 2022, saw gold prices enter backwardation, heading for mild gains throughout the week, thanks to the likelihood of smaller interest rate increases from the Federal Reserve.
Stuart Simonsen says that as spot gold prices traded higher than futures (i.e., backwardation), the short-term demand for the metal appears to be increasing.
Although both were set to grow by 0.3%, December-expiring gold futures fell by 0.1% per ounce to $1,752.74, as did spot gold.
That said, futures contracts extending beyond December traded higher than spot costs. January-expiring contracts traded at about $1,761.6 per ounce, while February-expiring futures traded at roughly $1,768.8 per ounce.
The same period saw silver futures rise by 0.3%, although they were expected to grow by 2%. And platinum futures fell by 0.2%, even though experts thought they’d add 1% instead.
Stock Index Futures in India Provide Benefits to US Investors
Experts look to stock index futures in India to provide whole-sector investment opportunities. They note the rollover advantage, allowing investors to avoid stock risks.
On top of that, Stuart Simonsen of Billings, MT says that the sectoral index futures enable optimal portfolio diversification, further reducing the risks involved.
Commission rates and the STT on index futures are much lower than stock or equities futures. Therefore, making index futures a much more economical investment for traders. They only need to pay a small percentage of the transaction to trade large amounts.