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U.S. Stock Markets Continue to Outperform China's Equity Markets

by Archer Financial Services | Sep 10, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures are higher as hopes for a new round of tax cuts overshadowed anxiety over global trade issues.

Republicans in the U.S. House of Representatives plan to unveil a new round of tax cuts this week.

Referred to as "Tax Reform 2.0," the package is intended to supplement President Donald Trump's 2017 tax overhaul.

The 2:00 central time July consumer credit report is expected to show an increase of $14 billion.

U.S equity markets continue to outperform China’s stock markets with U.S. stock index futures higher, while the Shanghai composite index is down 1.21% today.

Growth in Chinese exports weakened to slightly under 10% in August, which is down from over 12% in the previous month, according to government reports that were published over the weekend.

The still relatively low interest rate environment remains long term supportive to U.S. stock index futures.

 

CURRENCY FUTURES

The U.S. dollar is a little lower and the euro currency is higher in spite of hawkish interest rate comments from Eric Rosengren, president of the Federal Reserve Bank of Boston.

The British pound is higher on news that the UK economy grew more strongly than expected in July.

The U.K. economy grew 0.3% in July and 0.6% over the three months to July, which is the fastest pace in almost a year.

 

INTEREST RATE MARKET FUTURES

After sharp declines on Friday due to the stronger than anticipated nonfarm payrolls report, futures are mixed today.

Over the weekend Eric Rosengren of the Federal Reserve indicated the U.S. central bank should continue hiking its benchmark short term interest rate at its current quarterly pace this year, including at the policy meetings in September and December.

Atlanta Federal Reserve Bank President Raphael Bostic will speak at 10:30.

According to financial futures markets, the probability of a fed funds rate increase at the Federal Open Market Committee’s September 26 meeting is 98% and the probability of another fed funds rate hike in December is 79%.

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    2869.50      Resistance    2894.00

 

September 18   U.S. Dollar Index

Support    94.840        Resistance    95.590

 

September 18   Euro Currency

Support    1.15260      Resistance    1.16310

 

September 18   Japanese Yen

Support    .89890        Resistance    .90320

 

September 18   Canadian Dollar

Support    .75820        Resistance    .76110

 

September 18   Australian Dollar

Support    .7089          Resistance    .7139

 

December 18   Thirty Year Treasury Bonds

Support    142^4         Resistance    142^26

 

December 18   Gold

Support    1195.0        Resistance    1208.0

 

December 18   Copper

Support    2.5950        Resistance    2.6500

 

October 18   Crude Oil

Support    67.64          Resistance    68.77



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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