JimHuangChicago

JimHuangChicago

CME: Live Cattle ( CME:LE1! ), Lean Hog ( CME:HE1! ) Last month, the Bureau of Labor Statistics (BLS) reported that US inflation on food items was 5.7% in June, exactly half of its peak of 11.4% in August 2022. Food inflation is at its lowest level since November 2021. Under the sub-category “Meats, poultry, fish, and eggs” from Food-at-home, the BLS data shows...

JimHuangChicago

COMEX: Micro Gold Futures ( COMEX_MINI:MGC1! ), Micro Silver Futures ( COMEX_MINI:SIL1! ) Is gold an inflation hedge, a risk protection, a precious metal commodity, or a speculative investment? I think it is all of the above. Sometimes it could be one of them, but quite often gold puts on multiple hats, as its price could be driven by competing forces. Gold as...

JimHuangChicago

CME: Micro Nasdaq 100 Futures ( CME_MINI:MNQ1! ), E-Mini S&P Technology Select Sector Futures ( CME_MINI:XAK1! ) The Nasdaq 100 index tracks the 100 largest non-financial stocks listed on the Nasdaq stock exchange. Since its inception over 38 years ago, it has become the world’s preeminent large-cap growth index. So far in 2023, Nasdaq 100 has surged 42%, far...

JimHuangChicago

CME: Micro BTC ( CME:MBT1! ) A month’s ago, I published a trade idea titled “S&P 500: Expensive but Not Overpriced.” The S&P index closed at 4,409.16 on June 16th, placing it at one standard deviation above the three-year mean (µ) of 4027.2 at the time. On July 14th, the S&P settled at 4,505.42, up 100 points and +2.2% within a month. Market data has confirmed my...

JimHuangChicago

CBOT: 30-Year Micro Yield Futures ( CBOT_MINI:30Y1! ), Treasury Bond Futures ( CBOT:ZB1! ) As a result of runaway inflation and rising interest rates, US home buyers are confronted by high home prices, high down payments, and high monthly mortgage payments. A sneak peek into official housing market data between 2021 and 2023: • Median sales price of houses sold...

JimHuangChicago

CME: SOFR ( CME:SR31! ) On June 30th, SEC Chairman Gary Gensler posted a 3-minute short video on Twitter. In this educational piece titled RIP LIBOR, he explains what the London Interbank Offered Rate (LIBOR) is, and why its passing away is actually a good thing for consumers. As CFTC Chairman in 2009-2014 and SEC Chairman since 2021, Mr. Gensler oversaw the...

JimHuangChicago

NYMEX: WTI Crude Oil ( NYMEX:CL1! ), Micro Crude Oil ( NYMEX:MCL1! ) The talk of inflation deceleration created a wishful misperception. Does a CPI read from 9.1% to 4.0% mean price relief for consumer? Certainly not. Something costed $1 last year will go up to $1.04 this year on average. What really comes down is the rate and the pace of price increase, but the...

JimHuangChicago

CME: E-Mini S&P 500 ( CME_MINI:ES1! ), S&P Technology Sector ( CME_MINI:XAK1! ) These days, the S&P 500 is not behaving like a well-diversified stock market index. The “Magnificent Seven”, which includes Nvidia NASDAQ:NVDA , Apple NASDAQ:AAPL , Tesla NASDAQ:TSLA , Microsoft NASDAQ:MSFT , Google NASDAQ:GOOGL , Meta NASDAQ:META and Amazon NASDAQ:AMZN , is...

JimHuangChicago

Nasdaq 100 Index ( NASDAQ:NDX ), S&P Midcap ( SP:MID ) Since Jack Bogle created the first stock index fund in 1974, he has shown that passive investing in low-cost index mutual funds could beat active fund managers after cost. These days, there are countless of stock indexes and thousands of index funds to choose from. Picking the right market index, which I...

JimHuangChicago

CBOT: Micro 30-Year Treasury Yield ( CBOT_MINI:30Y1! ) President Biden and House Speaker Kevin McCarthy reached an agreement in principle late Saturday to raise the nation’s debt limit and cut federal spending, ending a rollercoaster round of negotiations. The current national debt ceiling is $31.4 trillion. The tentative deal would raise it by $4 trillion...

JimHuangChicago

CME: Chinese Yuan (CNH) Euro FX (6E), Micro S&P (MES), Micro Nasdaq (MNQ) The US government is within ten days of defaulting on its debts. If this unprecedented catastrophe were to happen, what could it trigger? Risky assets, from stock, bonds, FX, to commodities, will go through a violent period of reset and repricing. Weaker economies could be hit hard if the...

JimHuangChicago

CME: Live Cattle ( CME:LE1! ), Lean Hog ( CME:HE1! ) When I started my career in commodity futures two decades ago, I took lectures from a former trader at the CME livestock pit. Mike used his favorite trade to explain the complex concept of inter-commodity spread. Here it is: Beef and pork typically had a retail price difference of $1 per pound. For example, a...

JimHuangChicago

CBOT: Soybean ( CBOT:ZS1! ), Soybean Meal ( CBOT:ZM1! ), Soybean Oil ( CBOT:ZL1! ) This is the second installment on CBOT Soybean Complex. If you have not read the first piece, please click the link at the end of this idea. Let’s start with a discussion of two reports followed by soybean market participants. The Crop Report U.S. Department of Agriculture...

JimHuangChicago

CBOT: Soybean ( CBOT:ZS1! ), Soybean Meal ( CBOT:ZM1! ), Soybean Oil ( CBOT:ZL1! ) Today, I am starting a new series on CBOT soybeans, one of the most liquid commodities contracts in the world. In March 2023, Soybean, Soybean Meal, and Soybean Oil together traded 14.0 million lots, contributing to 42.6% of CME Group agricultural futures and options volume,...

JimHuangChicago

CME: E-Mini S&P 500 Put Options ( CME_MINI:ES1! ) Important data releases in the coming weeks would shed light on the health of the US economy and could have significant impacts on global financial markets. We will focus on a number of critical datasets, mainly the following, in the upcoming weeks: • Federal tax revenue (Tax filing deadline: April 18) • Existing...

JimHuangChicago

CME: Offshore RMB ( CME:CNH1! ), Micro RMB ( CME_MINI:MNH1! ) On April 5th, the Bureau of Economic Analysis reported the latest U.S. global trade data. For the first two months of 2023, total export and import were $328.9 and $489.7 billion, respectively. U.S. international trade balance was $160.9 billion in deficit. Export growth was very strong, at 9.5%...

JimHuangChicago

NYMEX: WTI ( NYMEX:CL1! ), RBOB Gasoline ( NYMEX:RB1! ) Over the weekend, eight OPEC producers, led by Saudi Arabia, announced intentions to cut oil production by 1.16 million barrels per day through the end of the year. This adds to Russia’s existing plan to trim 500,000 barrels from February level, bringing the combined voluntary cuts of OPEC+ members in excess...

JimHuangChicago

CME: Micro Bitcoin ( CME:MBT1! ) and Micro ETH ( CME:MET1! ) In First Quarter 2023, Cryptocurrencies rebounded strongly amid turmoil in the financial markets. CME Micro Bitcoin Futures (MBT) gained $11,825 or +71% year-to-date. Micro ETH Futures (MET) gained $510 or +39% YTD. Bitcoin rallied amid the collapses of Silicon Valley Bank and Credit Suisse. While US...