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Stock Index Futures Holding Well in Spite of Weak Nonfarm Payrolls

by Archer Financial Services | Jan 05, 2018

By Alan Bush | Senior Financial Economist at ADMIS     

STOCK INDEX FUTURES

S&P 500, Dow and NASDAQ futures advanced to new historical highs in the overnight trade.

Nonfarm payrolls increased 148,000 in December, which compared to expectations of a gain of 180,000 and the unemployment rate was 4.1%, as anticipated. The unemployment rate at 4.1% matches the lowest level since December 2000 for the third consecutive month.

Average hourly earnings were up .3%, which was as estimated by economists.

The 9:00 central time November factory orders report is expected to be up 1.1% and the 9:00 December Institute for Supply Management nonmanufacturing index is anticipated to be 57.6.

Futures are holding up well in spite of the weaker than expected nonfarm payrolls number.

The computer models that I use continue to generate bullish signals for stock index futures.

The main trend for stock index futures is higher. 

 

CURRENCY FUTURES

The U.S. dollar came off its overnight highs due to the weaker than expected nonfarm payrolls report.

The euro currency declined after a report showed the annual rate of inflation in the euro zone fell in December.

Consumer prices were 1.4% higher in December, which compares to the 1.5% rate recorded in November.

The British pound firmed after a report showed U.K. productivity increased the most in more than six years in the three months through September. Output per hour increased .9%, which is the biggest increase since the second quarter of 2011.

The Canadian dollar is higher on news that Canada added 78,600 jobs in December, while the unemployment rate plunged to the lowest level in over 40 years to 5.7%. 

 

INTEREST RATE MARKET FUTURES

Futures could only temporarily rally on the weak nonfarm payrolls report, which in itself should be viewed as a sign of weakness for futures.

Federal Reserve speakers today are Philadelphia Federal Reserve Bank President Patrick Harker at 9:15 and Cleveland Federal Reserve Bank President Loretta Mester at 11:30.

The probability of a fed funds rate hike at the FOMC’s March 21 policy meeting is 68%, which compares to 73% yesterday.

Futures are likely to work lower in the longer term, especially at the long end of the curve, as growth in the global economy accelerates.

      

SUPPORT AND RESISTANCE

 

March 18   S&P 500

Support    2720.00       Resistance    2737.00

 

March 18   U.S. Dollar Index

Support    91.420         Resistance    91.880

 

March 18   Euro Currency

Support    1.20660       Resistance    1.21350

 

March 18   Japanese Yen

Support    .88450         Resistance    .89110

 

March 18   Canadian Dollar

Support    .79850         Resistance    .81050

 

March 18   Australian Dollar

Support    .7825          Resistance    .7876

 

March 18   Thirty Year Treasury Bonds

Support    151^26        Resistance    152^24

 

February 18   Gold

Support    1311.0         Resistance    1328.0

 

March 18   Copper

Support    3.2150         Resistance    3.2800

 

February 18   Crude Oil

Support    61.17           Resistance    62.13

 

 For more information about these markets, please contact Alan at 312.242.7911  or via email at alan.bush@admis.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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