header_img

Traders Refocusing on U.S. - China Trade Issues

by Archer Financial Services | Aug 30, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures declined as optimism over U.S.-Canada trade talks was overshadowed by worries over Washington's tariff dispute with China.

The U.S. and Canada were upbeat about negotiations, which heightened hopes that talks will lead to a new agreement.

The number of U.S. workers filing new applications for unemployment benefits increased slightly last week.  Initial jobless claims increased by 3,000 to 213,000 in the week ended August 25. Economists predicted 215,000 new applications for unemployment benefits.  

Personal spending rose a seasonally adjusted 0.4% in July from a month ago, which was as expected and personal income increased 0.3%, which was also as anticipated.

U.S equity markets continue to gain on Chinese stock markets with the Shanghai Composite Index down 0.9%

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.

 

CURRENCY 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.

Some selling came into the euro currency on news that inflation in Germany was slightly weaker that estimated.

German jobless numbers declined 8,000 in August, leaving the jobless rate unchanged at a very low 5.2%.  

The British pound is lower after a report showed U.K. consumer lending slowed to the weakest level since November 2015. 

The Canadian dollar is weaker after a report showed Canada’s gross domestic product in the second quarter increased 2.9%, which compares to the median estimate of a gain of 3.0%.

 

INTEREST RATE MARKET FUTURES

In light off the ongoing trade issues, flight so quality buying is coming into the market.

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%, which is unchanged from yesterday.

In addition, another fed funds rate hike is likely in December.

I will be out of the office Friday, August 31.

 

SUPPORT AND RESISTANCE

September 18   S&P 500

Support    2903.00      Resistance    2919.00

 

September 18   U.S. Dollar Index

Support    94.310        Resistance    94.810

 

September 18   Euro Currency

Support    1.16630      Resistance    1.17370

 

September 18   Japanese Yen

Support    .89470        Resistance    .89960

 

September 18   Canadian Dollar

Support    .76920        Resistance    .77600

 

September 18   Australian Dollar

Support    .7272          Resistance    .7323

 

September 18   Thirty Year Treasury Bonds

Support    144^8         Resistance    145^0

 

December 18   Gold

Support    1203.0        Resistance    1217.0

 

December 18   Copper

Support    2.6950        Resistance    2.7450

 

October 18   Crude Oil

Support    69.43          Resistance    70.33


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