By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures are mixed as strong corporate earnings reports countered worries about escalating trade tensions between the U.S. and China.
Last week China proposed a set of tariffs on $60 billion worth of U.S. imports in retaliation to the Trump administration’s plans for 25% tariffs on $200 billion worth of Chinese imports.
The Shanghai Composite Index resumed its slide today, dropping for a fourth consecutive day and testing 2018 lows.
Over 400 companies in the S&P 500 have reported so far, and 78.6% have topped earnings estimates. This is substantially above the average of 72% in the past four quarters.
U.S. stock index futures are performing well in spite of the ongoing global trade uncertainties, as the still relatively low global interest rate environment and the mostly stronger than estimated U.S. corporate earnings reports remain supportive.
The U.S. dollar is higher, as ramped-up trade war rhetoric between the U.S. and its trading partners helped the greenback.
The euro currency is lower after a report showed German manufacturing orders plunged in June. The economics ministry said total manufacturing orders dropped 4.0% compared to May. Economists had forecast a .5% decline.
The British pound is lower on the belief that chances are increasing for a “no-deal Brexit.”
The Canadian dollar and the Australian dollar are lower in spite of higher crude oil prices.
Futures are mixed.
The probability of a fed funds rate hike at the Federal Open Market Committee’s September 26 meeting is 94%.
In addition, there are increasing probabilities of an additional rate hike in December.
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.
September 18 S&P 500
Support 2833.00 Resistance 2848.00
September 18 U.S. Dollar Index
Support 95.010 Resistance 95.420
September 18 Euro Currency
Support 1.15550 Resistance 1.16110
September 18 Japanese Yen
Support .89830 Resistance .90250
September 18 Canadian Dollar
Support .76670 Resistance .77120
September 18 Australian Dollar
Support .7373 Resistance .7415
September 18 Thirty Year Treasury Bonds
Support 142^20 Resistance 143^16
December 18 Gold
Support 1212.0 Resistance 1228.0
September 18 Copper
Support 2.7000 Resistance 2.7600
September 18 Crude Oil
Support 68.43 Resistance 69.88
For more information about these markets, please contact Alan at 312.242.7911 or via email at firstname.lastname@example.org. 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.