Stock Index Futures Higher in Spite of Ongoing Trade Tensions

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures are higher even though trade tensions appear to be escalating.

The main concern for investors is the end of a public consultation period today for President Donald Trump’s plan to impose tariffs on an additional $200 billion of Chinese products. This would represent a significant ramping-up of the trade war between the world's two largest economies.

China has warned of retaliation if the U.S. implements any new tariff measures.

U.S. equity markets continue to outperform China’s stock markets.

The August Automatic Data Processing employment change report showed an increase of 163,000 jobs when a gain of 190,000 was expected.

Initial weekly U.S. jobless claims fell by 10,000 to a seasonally adjusted 203,000 in the week ended September 1. This was the lowest number since December 1969. Consensus expectations had called for initial claims to be 213,000. 

The 8:45 central time August PMI services index is expected to be 55.2.

The 9:00 July factory orders report is anticipated to show a decline of .7% and the 9:00 August ISM non-manufacturing index is estimated to be 56.8.

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 is lower in spite of a possible escalating trade conflict between the U.S. and China.

The euro currency is higher despite news that German industrial orders fell unexpectedly. German manufacturing orders slumped 0.9% in July compared to June.  

The Swiss franc is higher after it was reported that the Swiss gross domestic product surprised on the upside and jumped 0.7% in the second quarter.  

The British pound is higher as traders anticipate a favorable Brexit outcome.

The Canadian dollar is higher even though building permits in Canada edged down In July. 

INTEREST RATE MARKET FUTURES

Futures are only mixed in spite of a possible escalating trade conflict between the U.S. and China.

New York Federal Reserve Bank President John Williams will speak at 9:00.

According to financial futures markets, the probability of a fed funds rate increase at the Federal Open Market Committee’s September 26 meeting is close to 100%.

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

SUPPORT AND RESISTANCE

September 18   S&P 500

Support    2882.00      Resistance    2898.00

September 18   U.S. Dollar Index

Support    94.870        Resistance    95.240

September 18   Euro Currency

Support    1.16160      Resistance    1.16710

September 18   Japanese Yen

Support    .89610        Resistance    .90150

September 18   Canadian Dollar

Support    .75700        Resistance    .76040

September 18   Australian Dollar

Support    .7160          Resistance    .7221

December 18   Thirty Year Treasury Bonds

Support    142^26       Resistance    143^12

December 18   Gold

Support    1199.0        Resistance    1215.0

December 18   Copper

Support    2.6050        Resistance    2.6800

October 18   Crude Oil

Support    68.33          Resistance    69.55

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.