header_img

Trade Tensions Dominate Financial Markets

by Archer Financial Services | Aug 06, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

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.

 

CURRENCY FUTURES

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.

 

INTEREST RATE MARKET FUTURES

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.

 

SUPPORT AND RESISTANCE

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 alan.bush@admis.com. Thank you.

Would you like to open an account with us? Go to our interactive New Account application at Open an Account. It is fast, saves on postage and it’s green.

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.

Offers