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Stock Index Futures Supported by Better U.S.

by Archer Financial Services | Jun 06, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES  

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.

 

CURRENCY FUTURES

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.     

     

INTEREST RATE MARKET FUTURES

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.

 

SUPPORT AND RESISTANCE

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 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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