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Stock Index Futures Up for Third Day

by Archer Financial Services | Nov 01, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

Global equity markets are mostly higher being supported by hints from China that additional stimulus measures may be coming soon. Earlier in the day there was another set of data that confirmed China’s economy is deteriorating.

U.S. stock index futures are higher for a third day due to a series of positive earnings reports.

U.S. initial jobless claims decreased by 2,000 to 214,000 in the week ended October 27 when economists expected 211,000 new claims last week.

The October manufacturing PMI will be released at 8:45 central time. The report in September showed 55.9.

Two 9:00 reports are scheduled.  The October ISM manufacturing index is anticipated to be 58.7 and September construction spending is estimated to show an increase of .2%.

Companies in the S&P 500 are on track to have posted a 26.3% gain in third quarter earnings with over half of the components having reported, according Refinitiv.

 

CURRENCY FUTURES

In a renewed risk-on move, the U.S. dollar is lower as the greenback backs off from a four  month high.

The euro currency rebounded from a two and a half month low as investors jumped back into risk.

The British pound soared on Brexit optimism. The Times of London reported that U.K. government sources indicated a tentative Brexit deal had been reached. The agreement would allow U.K. banks to keep operating in the European Union’s single market.

The Bank of England at its policy meeting today said officials on the nine-member Monetary Policy Committee voted unanimously to hold the central bank's benchmark interest rate steady at 75 basis points.  

Hopes that China would ramp up fiscal stimulus boosted the Australian dollar.

 

INTEREST RATE MARKET FUTURES

Futures are mixed to lower.

According to the financial futures markets, the probability of a fed funds rate hike at the Federal Open Market Committee’s December 19 policy meeting is 74%. Two weeks ago the probability was in the 85% area.

I am now only neutral on the interest rate futures markets, as it appears that the global economy is slowing and central banks that are hawkish, such as the Federal Reserve, will become less hawkish next year and those central banks that are accommodative will have to remain accommodative longer.

 

SUPPORT AND RESISTANCE

December 18   S&P 500

Support    2701.00      Resistance    2733.00

 

December 18   U.S. Dollar Index

Support    96.110        Resistance    96.970

 

December 18   Euro Currency

Support    1.13440      Resistance    1.14590

 

December 18   Japanese Yen

Support    .88650        Resistance    .89110

 

December 18   Canadian Dollar

Support    .75920        Resistance    .76630

 

December 18   Australian Dollar

Support    .7073          Resistance    .7197

 

December 18   Thirty Year Treasury Bonds

Support    137^20       Resistance    138^12

 

December 18   Gold

Support    1213.0        Resistance    1238.0

 

December 18   Copper

Support    2.6350        Resistance    2.7100

 

December 18   Crude Oil

Support    64.55          Resistance    65.75


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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