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Corporate Earnings Reports Remain Strong

by Archer Financial Services | Aug 09, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures are higher, as the second quarter earnings season winds down on a firm note.   

The producer price index was unchanged in July when an increase of .2% was expected, and the producer price index, excluding the often volatile food and energy categories, were up .1% in July when a .2% increase was anticipated. 

The number of Americans filing applications for new unemployment benefits remains near historic lows.

U.S. initial weekly jobless claims fell 6,000 to 213,000 in the week ended August 4, which compares to consensus expectations for initial claims to be 220,000. 

The 9:00 central time June wholesale trade report is estimated to be unchanged. 

Of the 440 companies in the S&P 500 that have reported results so far, 78.6% of them have surpassed analysts’ expectations.

U.S. stock index futures are performing well, with the S&P 500 close to all-time highs in spite of the ongoing global trade uncertainties.

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 due to prospects of a fed funds rate hike in September and possibly another one in December.

Yesterday the British pound fell below $1.29 for the first time in almost a year on continuing worries that the U.K. will leave the E.U. without a trade deal.

In addition, there is talk that it will be a long time before the Bank of England will be in a position to increase its key interest rate again.

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

The Canadian dollar was pressured by news that housing starts in Canada fell 16.2% in July from June.

  

INTEREST RATE MARKET FUTURES 

The Treasury will auction 30 year bonds today.

The probability of a fed funds rate hike at the Federal Open Market Committee’s September 26 meeting is 96%, which compares to 98% yesterday. 

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

In spite of mostly higher prices today, the longer term trend for futures is lower, especially for the thirty year Treasury bonds.

 

SUPPORT AND RESISTANCE 

September 18   S&P 500

Support    2852.00      Resistance    2866.00

 

September 18   U.S. Dollar Index

Support    94.780        Resistance    95.230

 

September 18   Euro Currency

Support    1.16010      Resistance    1.16580

 

September 18   Japanese Yen

Support    .90100        Resistance    .90580

 

September 18   Canadian Dollar

Support    .76620        Resistance    .77030

 

September 18   Australian Dollar

Support    .7409          Resistance    .7460

 

September 18   Thirty Year Treasury Bonds

Support    142^16       Resistance    143^8

 

December 18   Gold

Support    1216.0        Resistance    1228.0

 

September 18   Copper

Support    2.7500        Resistance    2.8200

 

September 18   Crude Oil

Support    66.31          Resistance    67.48


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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