By Alan Bush | Senior Financial Economist at ADMIS
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.
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.
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.
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 email@example.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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