By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures are higher with investors turning their focus back to quarterly earnings and monetary policy.
According to payroll processor Automatic Data Processing Inc., hiring at private U.S. employers grew more than expected in January, increasing 234,000 workers. Economists had expected a gain of 193,000 jobs.
The 8:45 central time January Chicago PMI is anticipated to be 64 and the 9:00 December pending home sales report is anticipated to be up .5%.
With fourth quarter corporate earnings season well under way, of the S&P 500 companies that have reported, 82% of them beat earnings estimates and 85% topped sales forecasts.
Today is the second day of a two day Federal Open Market Committee meeting. A statement will be released at 1:00.
I believe the FOMC statement will be on the hawkish side with the central bank likely to raise its economic assessment.
Once the FOMC meeting is out of the way, I expect the bull market to resume.
The main trend for stock index futures is higher.
The U.S. dollar is lower and is on track for the biggest monthly decline since March 2016.
The main trend for the U.S. dollar is lower.
The euro currency is higher after a report showed German joblessness hit a record low.
The jobless rate in Germany fell to of 5.4 % in January and the number of people out of work plunged a seasonally adjusted 25,000 to 2.415 million. Economists predicted a drop of 17,000.
The euro was also supported be news that underlying inflation in the euro zone accelerated to 1.2% in January from 1.1% in the prior month.
Expect higher prices for the euro currency, as speculation grows that the European Central Bank will remove some of its accommodation later this year. In fact, some analysts are expecting an interest rate hike from the ECB in the first quarter of 2019.
The probability of a fed funds rate hike from the Federal Open Market Committee today is 5%, which is the same as yesterday.
The probability of a fed funds rate increase at the FOMC’s March 21 policy meeting is 76%, which is unchanged from yesterday.
In the longer term outlook, futures are likely to work lower, as it is likely that commodity and wage inflation will accelerate this year and be above the consensus estimates.
This will adversely impact the 30 year Treasury bond futures the most, since the long end of the curve is the most susceptible to the inflation influence.
March 18 S&P 500
Support 2819.00 Resistance 2845.00
March 18 U.S. Dollar Index
Support 88.510 Resistance 89.210
March 18 Euro Currency
Support 1.24240 Resistance 1.25190
March 18 Japanese Yen
Support .91840 Resistance .92450
March 18 Canadian Dollar
Support .81000 Resistance .81760
March 18 Australian Dollar
Support .8036 Resistance .8126
March 18 Thirty Year Treasury Bonds
Support 147^4 Resistance 148^16
April 18 Gold
Support 1337.0 Resistance 1354.0
March 18 Copper
Support 3.1700 Resistance 3.2350
March 18 Crude Oil
Support 63.47 Resistance 64.67
For more information about these markets, please contact Alan at 312.242.7911 or via email at firstname.lastname@example.org. 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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