By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures are higher as expectations grew that the U.S. and China would begin new trade talks, while an interest rate increase in Turkey supported the Turkish lira and global risk appetite.
The Shanghai Composite Index fell after data showed cooling real estate investment in China in August.
U.S. retail sales in August increased 0.1% from the prior month, which was well below the 0.4% increase economists had expected.
Core retail sales were also weaker than anticipated, gaining 0.3% last month. Economists were expecting an increase of 0.5%.
U.S. import prices decreased 0.6% in August from the previous month. August's monthly drop was lower than the 0.3% decline that was forecast by economists.
U.S. industrial output increased for the third month in a row in August. Industrial production grew 0.4% in August from the prior month, when economists had expected a 0.3% gain.
Capacity utilization increased by 0.2% to 78.1% in August. Economists had expected 78.2%.
Two 9:00 central time reports are scheduled. July Business Inventories are expected to be up .5% and the September Consumer Sentiment index is anticipated to be 97.
Despite of a variety of ongoing geopolitical issues, the still relatively low interest rate environment is dominating and remains long term supportive to U.S. stock index futures.
The euro currency is lower after a report showed the euro zone posted its smallest trade surplus in four years.
The 0.8% drop in goods exported during July indicates the euro zone economy is unlikely to rebound any time soon from the slowdown in the first half of this year.
The Canadian dollar and the Australian dollar are lower in spite of higher crude oil prices.
The thirty year Treasury bond futures fell to a five month low in spite of the bullish decline in U.S retail sales and the larger than expected drop in U.S. import prices.
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%, and the probability of another fed funds rate hike in December is 80%.
Futures are ignoring bullish news, which should be viewed as a sign of weakness.
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.
September 18 S&P 500
Support 2899.00 Resistance 2916.00
September 18 U.S. Dollar Index
Support 94.260 Resistance 94.800
September 18 Euro Currency
Support 1.16550 Resistance 1.17350
September 18 Japanese Yen
Support .89160 Resistance .89550
September 18 Canadian Dollar
Support .76700 Resistance .77110
September 18 Australian Dollar
Support .7163 Resistance .7223
December 18 Thirty Year Treasury Bonds
Support 141^12 Resistance 142^12
December 18 Gold
Support 1203.0 Resistance 1217.0
December 18 Copper
Support 2.6600 Resistance 2.7000
October 18 Crude Oil
Support 68.45 Resistance 69.55
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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The risk of loss in trading futures and options on futures can be substantial. Each investor must carefully consider whether this type of investment is appropriate for them. Past performance is not necessarily indicative of future results.