Stock index futures are holding up well in spite of a weak retail sales report as spending at U.S. retailers declined in June for the second consecutive month. Today’s report was the first back-to-back sales drop since July and August of 2016.
Retail sales decreased a seasonally adjusted .2% in June from the prior month. Economists expected a .1% increase. Also, excluding autos, sales were down 0.2% last month when economists had predicted .2% gain.
The June consumer price index was unchanged from the prior month, which compares to the estimate of a .1% increase.
So once again it appears that we are in a situation where the bad news is the good news in that weak economic data will delay a fed funds rate hike.
The main trend for stock index futures is higher.
The U.S. dollar fell to a 10 month low after weaker than expected U.S. retail sales and consumer price index reports. Interest rate differentials remain unfavorable to the greenback.
Longer term it appears that lower prices are likely for the U.S. dollar.
Most foreign currencies advanced against the greenback as a result of the weak U.S. economic data. The euro currency remains near 14 month highs.
Speculation remains that the European Central Bank could announce plans to wind down its quantitative easing program at its September 7 policy meeting.
The main trend for the euro currency is higher.
The Canadian dollar and the Australian dollar were also supported by advancing crude oil prices.
Futures quickly advanced when the weak retail sales and inflation reports were released.
The probability that the Federal Open Market Committee will increase its fed funds rate at the December 13 meeting is 48%, which compares to 57% yesterday.
The long term fundamentals for futures are mixed.
September 17 S&P 500
Support 2439.00 Resistance 2454.00
September 17 U.S. Dollar Index
Support 94.930 Resistance 95.660
September 17 Euro Currency
Support 1.14230 Resistance 1.15260
September 17 Japanese Yen
Support .88220 Resistance .89440
September 17 Canadian Dollar
Support .78440 Resistance .78960
September 17 Australian Dollar
Support .7711 Resistance .7838
September 17 Thirty Year Treasury Bonds
Support 152^0 Resistance 153^20
August 17 Gold
Support 1214.0 Resistance 1235.0
September 17 Copper
Support 2.6600 Resistance 2.6950
August 17 Crude Oil
Support 45.78 Resistance 46.88
For more information about these markets, please contact Alan at 312.242.7911 or via email at email@example.com. Thank you.
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Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The risk of loss in trading futures and options can be substantial. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. Research analyst does not currently maintain positions in the commodities specified within this report. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright © ADM Investor Services, Inc.
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