By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures are higher and are building on the strong recovery in yesterday’s trade, as fears about a trade war between the U.S. and China were reduced on signs that the two countries were open to negotiations on tariffs.
There are reports that China and the U.S. left the door open for a negotiated solution to trade disputes.
The improvement in sentiment was helped yesterday when White House economic adviser Larry Kudlow said the U.S. measures were a form of trade negotiations and that President Trump’s tariffs on China are all proposals.
Initial jobless claims increased last week, but they remain near multi-decade lows. Jobless claims increased by 24,000 to a seasonally adjusted 242,000 in the week ended March 31. Economists expected 225,000 new claims last week.
Political markets are always the most difficult to trade in any market, which warrants caution.
Ongoing trade issues will probably continue for a while, but they will only temporarily pressure futures.
The U.S. dollar firmed due to reports that the U.S. may negotiate a resolution to trade issues with China.
The British pound is lower after a report showed the U.K. service sector grew at the slowest rate in more than 18 months during March. A purchasing managers index for the service sector declined to 51.7 from 54.5 in February, which was weaker than the estimate of a decline to 54.0.
In addition, the pound was pressured by a report that showed U.K. car registrations in March plunged 15.7% from a year ago.
Flight to quality longs are being liquidated in the Japanese yen in light of the perceived easing of trade tensions between the U.S. and China.
Flight to quality longs are being liquidated due to the apparently easing global trade tensions.
Atlanta Federal Reserve Bank President Raphael Bostic will speak at 12:00 central time.
The probability of a fed funds rate hike from the Federal Open Market Committee at the June 13 meeting is 80%, which is unchanged from yesterday.
June 18 S&P 500
Support 2641.00 Resistance 2673.00
June 18 U.S. Dollar Index
Support 89.660 Resistance 90.190
June 18 Euro Currency
Support 1.22860 Resistance 1.23660
June 18 Japanese Yen
Support .93670 Resistance .94200
June 18 Canadian Dollar
Support .78130 Resistance .78660
June 18 Australian Dollar
Support .7673 Resistance .7732
June 18 Thirty Year Treasury Bonds
Support 144^20 Resistance 145^20
June 18 Gold
Support 1322.0 Resistance 1341.0
May 18 Copper
Support 3.0100 Resistance 3.0700
May 18 Crude Oil
Support 62.89 Resistance 63.93
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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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