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Nonfarm Payrolls Stronger than Expected

by Archer Financial Services | Sep 07, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures declined after the August jobs report showed an increase in hiring and healthy wage growth, which bolsters the case for the Federal Open Market Committee to continue hiking interest rates at its current pace.

Nonfarm payrolls increased 201,000 in August, which compares to expectations of a gain of 191,000 and the unemployment rate was 3.9% last month when 3.8% was anticipated. Wages rose 2.9% from a year ago in August.

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 advanced when the stronger than expected U.S. employment numbers were released.

The euro currency fell when it was reported that gross domestic product the euro zone increased at an annualized rate of 1.5%, which is slightly below the 1.6% rate of expansion that was reported in the first quarter.

The Canadian dollar is lower on news that the unemployment rate in Canada increased to 6.0% when 5.9% was estimated by economists.

In addition, the Canadian economy unexpectedly lost jobs in August. The economy dropped a net 51,600 jobs in August when market expectations were for an increase in employment of 5,000.

  

INTEREST RATE MARKET FUTURES

Futures declined when the stronger than anticipated U.S. employment numbers were reported.

Dallas Federal Reserve Bank President Robert Kaplan will speak at 12:20.

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.

The long term trend for futures is lower as the U.S. economy remains strong and the FOMC will likely continue on its tightening path.

 

SUPPORT AND RESISTANCE

September 18   S&P 500

Support    2863.00      Resistance    2887.00

 

September 18   U.S. Dollar Index

Support    94.790        Resistance    95.350

 

September 18   Euro Currency

Support    1.15610      Resistance    1.16670

 

September 18   Japanese Yen

Support    .89860        Resistance    .90770

 

September 18   Canadian Dollar

Support    .75820        Resistance    .76350

 

September 18   Australian Dollar

Support    .7117          Resistance    .7211

 

December 18   Thirty Year Treasury Bonds

Support    142^16       Resistance    143^26

 

December 18   Gold

Support    1195.0        Resistance    1211.0

 

December 18   Copper

Support    2.5900        Resistance    2.6500

 

October 18   Crude Oil

Support    67.03          Resistance    68.27


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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