By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures were a little lower in the overnight trade on uncertainty over Canada’s position in NAFTA. The U.S. and Canada are set for bilateral talks today, as the two nations work to salvage the North American Free Trade Agreement.
Futures recovered when the stronger than expected second quarter gross domestic product report was released.
Gross domestic product, which is the value of all goods and services produced across the economy, increased at a 4.2% annual rate in the second quarter. Economists expected an unchanged reading of 4.1%
The 4.2% rate marks the strongest pace of growth in almost four years.
The 9:00 central time July pending home sales index is expected to be unchanged.
The still relatively low global interest rate environment and the mostly stronger than estimated U.S. corporate earnings reports remain long term supportive to U.S. stock index futures.
The U.S. dollar firmed due to concerns that the conflict over trade between the U.S. and China was not about to be resolved any time soon.
There was additional support for the greenback on news of the stronger than anticipated U.S. gross domestic product report.
The Canadian dollar and the Australian dollar are only mixed in spite of gains in crude oil prices.
Futures are mixed with the bullish influence of flight to quality buying being offset by the bearish influence of the stronger than estimated U.S. gross domestic product report.
The Treasury will auction seven year notes today.
The latest reading on gross domestic product bolsters the probability that Federal Reserve officials will raise short term interest rates two more times this year.
Central bank officials have already hiked rates twice this year to a range of between 1.75% and 2%.
According to financial futures markets, the probability of a fed funds rate increase at the Federal Open Market Committee’s September 26 meeting is 96%.
September 18 S&P 500
Support 2895.00 Resistance 2911.00
September 18 U.S. Dollar Index
Support 94.550 Resistance 94.880
September 18 Euro Currency
Support 1.16630 Resistance 1.17260
September 18 Japanese Yen
Support .89830 Resistance .90160
September 18 Canadian Dollar
Support .77270 Resistance .77600
September 18 Australian Dollar
Support .7280 Resistance .7360
September 18 Thirty Year Treasury Bonds
Support 144^8 Resistance 144^30
December 18 Gold
Support 1203.0 Resistance 1217.0
September 18 Copper
Support 2.6900 Resistance 2.7400
October 18 Crude Oil
Support 68.17 Resistance 69.43
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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