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"Risk-On" for No Obvious Reason

by Archer Financial Services | Aug 07, 2018

By Alan Bush | Senior Financial Economist at ADMIS   
 

All of the financial markets are performing as if there is a thaw coming in tensions between the U.S. and China.  Global stock index futures are mostly higher. Flight to quality markets, such as Treasuries are being liquidated and the U.S. dollar is weaker.

STOCK INDEX FUTURES

The 9:00 central time June Job Openings and Labor Turnover Survey (JOLTS) is expected to be 6.65 million.

The 2:00 June consumer credit report is anticipated to show a $16 billion increase.

Of the 413 companies in the S&P 500 that have reported results so far, 79.2% of them have surpassed estimates. If this continues, it will be the highest number on record going back to the first quarter of 1994, according to Thomson Reuters.

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 lower on limited news.

The euro currency is higher after it was reported that German exports in June of this year increased 7.8% compared to June of 2017.

The Canadian dollar and the Australian dollar are higher due to higher crude oil prices.

The Reserve Bank of Australia held its regularly scheduled policy meeting today. The RBA kept its key interest rate at a record low 1.5%, as expected. Economists believe Australia’s central bank may not be able to hike interest rates until late in 2019 or early 2020.  

 

INTEREST RATE MARKET FUTURES

Futures are mostly lower, especially at the long end of the curve.

The Treasury will auction three year notes today.

The probability of a fed funds rate hike at the Federal Open Market Committee’s September 26 meeting is 94%, which is unchanged from yesterday. 

Also, there are increasing probabilities of an additional rate hike in December.

The longer term trend for futures is lower, especially for the thirty year Treasury bonds.

 

SUPPORT AND RESISTANCE

September 18   S&P 500

Support    2846.00      Resistance    2863.00

 

September 18   U.S. Dollar Index

Support    94.720        Resistance    95.270

 

September 18   Euro Currency

Support    1.15810      Resistance    1.16520

 

September 18   Japanese Yen

Support    .89970        Resistance    .90430

 

September 18   Canadian Dollar

Support    .76860        Resistance    .77270

 

September 18   Australian Dollar

Support    .7376          Resistance    .7455

 

September 18   Thirty Year Treasury Bonds

Support    142^20       Resistance    143^12

 

December 18   Gold

Support    1213.0        Resistance    1228.0

 

September 18   Copper

Support    2.7200        Resistance    2.7750

 

September 18   Crude Oil

Support    68.66          Resistance    70.11


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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