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Stock Index Futures Holding Up Well in Spite of Mostly Bearish News

by Archer Financial Services | Aug 03, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

Futures came under pressure when the U.S. employment report was released.

U.S. nonfarm payrolls increased by a seasonally adjusted 157,000 in July, which compares to expectations of 190,000 new jobs and the unemployment rate was 3.9%, which was as anticipated.  Revised figures show employers added 248,000 jobs in June and 268,000 in May, which is a net upward revision of 59,000.

The unemployment rate was 4.0% in the prior month.

According to the Financial Times, China lost its status as the world's second largest stock market to Japan as a result of the trade war with the U.S.

The 8:45 central time July PMI Services Index is expected to be 56.3 and the 9:00 July ISM Non-Manufacturing Index is anticipated to be 58.8.

U.S. stock index futures are performing well in spite of the ongoing global trade uncertainties and the weaker than expected nonfarm payrolls report, as the still relatively low global interest rate environment and the mostly stronger than estimated U.S. corporate earnings reports remain supportive.

 

CURRENCY FUTURES

The U.S. dollar is lower and most foreign currencies are higher, with the exception of the British pound, due to the weaker than expected U.S. nonfarm payrolls report.

The British pound is lower on news that the U.K. services sector PMI weakened to a three month low coming in at 53.5, which is down from 55.1 in June and less than the 54.7 forecast by analysts. 

The Canadian dollar and the Australian dollar are higher in spite of weaker crude oil prices.

 

INTEREST RATE MARKET FUTURES

Futures advanced due to the weaker than anticipated U.S. nonfarm payrolls report. However, futures appear to be underperforming the news.

In spite of the weak nonfarm payrolls report, the probability of a fed funds rate hike at the Federal Open Market Committee’s September 26 meeting is over 90%. 

Although flight to quality buying is likely to come into the market from time to time, the longer term trend for futures is lower, especially for the thirty year Treasury bonds.

 

SUPPORT AND RESISTANCE

September 18   S&P 500

Support    2821.00      Resistance    2839.00

 

September 18   U.S. Dollar Index

Support    94.700        Resistance    95.240

 

September 18   Euro Currency

Support    1.15880      Resistance    1.16580

 

September 18   Japanese Yen

Support    .89570        Resistance    .90070

 

September 18   Canadian Dollar

Support    .76670        Resistance    .77120

 

September 18   Australian Dollar

Support    .7346          Resistance    .7418

 

September 18   Thirty Year Treasury Bonds

Support    142^0         Resistance    142^26

 

December 18   Gold

Support    1211.0        Resistance    1229.0

 

September 18   Copper

Support    2.7000        Resistance    2.7900

 

September 18   Crude Oil

Support    68.43          Resistance    69.55


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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