By Alan Bush | Senior Financial Economist at ADMIS
Russell 2000 futures advanced to a new historical high in the overnight trade and NASDAQ futures are closing in on new record highs.
Some of the strength today took place after the U.S. and China exchanged trade proposals in an effort to avoid an escalation of economic tensions.
The Labor Department said a gauge of compensation costs, unit labor costs, increased at a 2.9% annual rate in the first three months of the year. Economists had expected first quarter labor costs to increase at a 2.8% rate.
U.S. productivity increased less than expected in the first quarter. The productivity of nonfarm workers, increased at a .4% annual rate in the first quarter. Economists had expected first quarter productivity to rise at a .6% rate.
Stock index futures are higher even though the World Bank said global growth is likely to slow over the next two years as central banks increase borrowing costs and the impact of U.S. fiscal stimulus starts to fade.
Traders appear to be gradually shift their focus of attention more toward the still bullish overall accommodative global interest rate policies and away from the geopolitical worries.
The U.S. dollar is lower and the euro currency is higher due to hawkish comments from European Central Bank officials suggesting that the ECB's June 14 meeting will debate the end of its quantitative easing program.
The ECB's chief economist sent a strong signal that the central bank could decide as early as next week to wind down its EUR30 billion-a-month ($35.09 billion) bond buying program.
In addition, there is speculation that the ECB could end its asset purchase program by the end of this year.
The Canadian dollar and the Australian dollar are higher in spite of lower crude oil prices.
The Canadian dollar advanced despite news that Canadian building permits fell in April.
Flight to quality longs were liquidated due to a better tone to the U.S. - China trade dispute.
The probability of a fed funds rate hike from the Federal Open Market Committee at the June 13 meeting is 94%, which compares to 91% yesterday.
Although geopolitical events will inevitably develop from time to time, which will produce short periods of flight to quality buying, the main trend for futures is lower.
June 18 S&P 500
Support 2747.00 Resistance 2763.00
June 18 U.S. Dollar Index
Support 93.440 Resistance 93.950
June 18 Euro Currency
Support 1.17160 Resistance 1.17970
June 18 Japanese Yen
Support .90710 Resistance .91210
June 18 Canadian Dollar
Support .77050 Resistance .77850
June 18 Australian Dollar
Support .7611 Resistance .7685
September 18 Thirty Year Treasury Bonds
Support 142^16 Resistance 143^14
August 18 Gold
Support 1295.0 Resistance 1308.0
July 18 Copper
Support 3.1900 Resistance 3.2650
July 18 Crude Oil
Support 64.71 Resistance 66.31
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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The risk of loss in trading futures and options on futures can be substantial. Each investor must carefully consider whether this type of investment is appropriate for them. Past performance is not necessarily indicative of future results.