By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures are lower as prospects for higher interest rates from the Federal Reserve increase.
New York manufacturers reported that business activity continued to improve in May.
The Empire State manufacturing survey's general business conditions index, compiled by the Federal Reserve Bank of New York, improved to 20.1 in May from 15.8 in the previous month. Economists were predicting a reading of 15.
The prices paid portion of the report rose to its highest level since 2011, growing to 54 in May from 47.4 in April and the prices received index was higher at 23 from 20.7 in May .
The new orders index advanced to 16 from 9, and delivery times continued to lengthen.
The Commerce Department said retail sales in April increased a seasonally adjusted .3% in April from the previous month, as expected.
The 9:00 central time March business inventories report is expected to be up .2% and the 9:00 May housing market index is anticipated to be 69.
A second round of high level trade negotiations between the U.S. and China takes place in Washington today through Saturday.
In the longer term, traders will probably gradually shift their focus of attention more toward corporate earnings and the still overall accommodative global interest rate policies and away from a variety of geopolitical worries, including global trade tensions and now the situation between the U.S. and Iran.
The U.S. dollar advanced after the stronger than estimated May Empire State manufacturing survey was released.
The British pound is lower in spite of news that wage growth in the U.K. outpaced inflation for the first time in a year and even though the U.K. economy added almost 200,000 jobs.
The Canadian dollar and the Australian dollar are lower due to interest rate differential expectations, ignoring the bullish influence of the increase in crude oil prices.
Futures declined when the stronger than estimated May Empire State Manufacturing Survey was released.
At 12:10 San Francisco Federal Reserve Bank President John Williams will speak at the Economic Club of Minnesota in Minneapolis.
The Federal Reserve is forecasting another two rate hikes this year, although an increasing number of policymakers see three more as a possibility.
The probability of a fed funds rate increase from the FOMC at the June 13 meeting is almost 100%, which is unchanged from yesterday.
While a June interest rate hike from the Federal Reserve appears to be almost fully priced in, the probability of an additional rate hike in December stands at 93%, which compares to 91% yesterday.
June 18 S&P 500
Support 2706.00 Resistance 2734.00
June 18 U.S. Dollar Index
Support 92.430 Resistance 93.210
June 18 Euro Currency
Support 1.18430 Resistance 1.19720
June 18 Japanese Yen
Support .90770 Resistance .91450
June 18 Canadian Dollar
Support .77330 Resistance .78320
June 18 Australian Dollar
Support .7447 Resistance .7544
June 18 Thirty Year Treasury Bonds
Support 141^12 Resistance 142^26
June 18 Gold
Support 1291.0 Resistance 1316.0
July 18 Copper
Support 3.0400 Resistance 3.1050
June 18 Crude Oil
Support 70.55 Resistance 72.21
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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