By Alan Bush | Senior Financial Economist at ADMIS
U.S. consumer price growth in December was the slowest since August 2017.
The U.S. consumer price index declined 0.1% in December, after November’s unchanged reading. The data was in line with consensus estimates. For the year, headline inflation increased 1.9%.
Monthly core inflation, which takes out the volatile food and energy components, rose 0.2%, following a 0.2% increase in November. Economists were expecting to see a 0.2% gain.
U.S. officials expect China’s top trade negotiator may visit Washington this month, suggesting higher level discussions are likely to follow this week’s talks with mid-level officials in Beijing.
Large U.S. banks will kick off fourth quarter earnings next week. S&P 500 companies on average are expected to post 14.5% growth in earnings per share, according to IBES data from Refinitiv.
However, expectations for growth in 2019 are at 6.4%, which is down from an expectation of 7.3% growth on January 1.
It may take a while, but downward pressure on interest rates globally, but not from the Fed in the short term, will ultimately rescue this market.
The U.S. dollar is lower as interest rate differential expectations are turning against the U.S. dollar.
The euro currency is higher and is headed for its biggest weekly gain in over four months, with the U.S. dollar weakening on cautious signals from the Federal Reserve about additional interest rate hikes.
The British pound is higher after a report that Brexit could be delayed beyond the March deadline before paring gains when the government ruled out an extension.
Prices are higher in light of lower prices for stock index futures.
Yesterday, at the Economic Club of Washington, Federal Reserve Chairman Jerome Powell reiterated the U.S. central bank will be patient about increasing interest rates.
Financial futures markets are predicting a 69% probability of the fed funds rate remaining unchanged at the current level of 2.25%-2.50% this year.
There is a 19% chance of an increase in the fed funds rate by 25 basis points and there is a 12% probability of a 25 basis point rate cut this year.
Longer term, I expect the interest rate futures market will likely trend higher, led by the thirty year Treasury bond futures.
Gold and silver daily charts are forming a symmetrical triangle pattern. The rule of thumb is that prices break out of a congestion pattern in the same direction that they came into the pattern approximately 65% on the time.
The long term trend for gold and silver is higher.
March 19 S&P 500
Support 2575.00 Resistance 2602.00
March 19 U.S. Dollar Index
Support 94.670 Resistance 95.190
March 19 Euro Currency
Support 1.15330 Resistance 1.16160
March 19 Japanese Yen
Support .92590 Resistance .93030
March 19 Canadian Dollar
Support .75450 Resistance .76050
March 19 Australian Dollar
Support .7181 Resistance .7249
March 19 Thirty Year Treasury Bonds
Support 145^0 Resistance 146^0
February 19 Gold
Support 1285.0 Resistance 1297.0
March 19 Copper
Support 2.6300 Resistance 2.6800
February 19 Crude Oil
Support 51.63 Resistance 53.55
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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