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Earnings Season Begins

by Archer Financial Services | Apr 12, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES    

Stock index futures are higher, looking past geopolitical risks and concerns about possible faster interest rate increases.

Some support is coming from ideas that Syria tensions may be ebbing, especially after President Donald Trump made comments that cast doubt over the timing of his threatened military strike on Syria.

President Trump tweeted, “Never said when an attack on Syria would take place. Could be very soon or not so soon at all!”

In addition, there is support from expectations of strong corporate earnings. Earnings season starts tomorrow.

Some analysts are predicting quarterly earnings for S&P 500 companies will increase 17% to 18.5% from a year ago.

Initial jobless claims decreased by 9,000 to a seasonally adjusted 233,000 in the week ended April 7. Claims have now held below 300,000 for 162 consecutive weeks, which is the longest streak for weekly records going back to 1967.

Economists expected 230,000 new claims last week. 

Longer term, traders will probably gradually shift their focus of attention more toward earnings and the still accommodative global interest rate environment.

 

CURRENCY FUTURES

After four days of declines, the U.S. dollar is higher as prospects for a fed funds rate hike in June increased.

The euro currency is lower after a report showed industrial production in the euro zone fell for a third straight month in February.

The European Union's statistics agency said output in February was .8% lower than in January. Economists anticipated a .2% increase.   

Flight to quality longs are being liquidated in the Japanese yen in light of the reduced tensions in Syria.

The Canadian dollar and the Australian dollar are lower due to weaker crude oil prices.

 

INTEREST RATE MARKET FUTURES

There was some pressure on futures after yesterday’s release of the minutes from the March Federal Open Market Committee meeting indicated Federal Reserve officials were a little more hawkish than expected. 

In addition, some of the selling can be attributed to a better tone to the situation in Syria, prospects of tighter credit from the Fed and today’s Treasury offering of 30 year bonds.

The probability of a fed funds rate hike from the Federal Open Market Committee at the June 13 meeting is 90%, which compares to 85% yesterday.

 

SUPPORT AND RESISTANCE

 

June 18   S&P 500

Support    2636.00       Resistance    2665.00

 

June 18   U.S. Dollar Index

Support    89.110         Resistance    89.640

 

June 18   Euro Currency

Support    1.23600       Resistance    1.24450

 

June 18   Japanese Yen

Support    .93530         Resistance    .94150

 

June 18   Canadian Dollar

Support    .79350         Resistance    .79830

 

June 18   Australian Dollar

Support    .7733           Resistance    .7783

 

June 18   Thirty Year Treasury Bonds

Support    145^20        Resistance    146^16

 

June 18   Gold

Support    1340.0         Resistance    1362.0

 

May 18   Copper

Support    3.0300         Resistance    3.1250

 

May 18   Crude Oil

Support    66.23           Resistance    66.73


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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