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U.S. Bank Earnings Better

by Archer Financial Services | Jan 16, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S stock index futures are higher, lifted by strong quarterly results from several major U.S. banks.

Import prices decreased 1.0% in December from the previous month when a 1.2% decline was expected and export prices were down .6%, which compares to the estimate of a decline of .3%.

The January Atlanta Federal Reserve business inflation expectations index will be released at 9:00 central time. Last month the index was 2.3.

The 9:00 January housing market index is anticipated to be 57.

S&P 500 companies are expected to report a 14% increase in fourth quarter earnings, which compares to the 20.1% growth that was forecast in October, according to Refinitiv.

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.

 

CURRENCY FUTURES

The U.S. dollar firmed and the euro currency declined in spite of interest rate differential expectations that are turning slightly against the greenback.

The British pound is higher despite the increased probability of a softer Brexit, or remaining in the E.U. as a result of the vote in parliament last night.

U.K. lawmakers will vote on a no-confidence motion in Prime Minister Theresa May’s leadership later today after the defeat of her Brexit deal.

The U.K. inflation rate fell to 2.1% in December from 2.3% in the previous month, according to the Office for National Statistics. 

The figure is close to the Bank of England's target of 2% and suggests the central bank is less likely to consider any rate hikes in the near future.

 

INTEREST RATE MARKET FUTURES

The Fed’s Beige Book on the economy will be released at 1:00. This book is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee.

Minneapolis Federal Reserve Bank President Neel Kashkari will speak at 6:30 this evening.

Financial futures markets are predicting a 73% probability of the fed funds rate remaining unchanged at the current level of 2.25%-2.50% this year.

There is a 17% chance of an increase in the fed funds rate by 25 basis points and there is a 10% probability of a 25 basis point rate cut in 2019.

With the improving probability of a U.S.-China trade deal coming sooner rather than later, in my opinion, now is a good time to stand aside in the interest rate futures markets.

However, the long term trend for gold and silver still appears to be higher.

 

SUPPORT AND RESISTANCE

March 19 S&P 500

Support    2599.00      Resistance    2622.00

 

March 19 U.S. Dollar Index

Support    95.420        Resistance    95.850

 

March 19 Euro Currency

Support    1.14270      Resistance    1.14910

 

March 19 Japanese Yen

Support    .92210        Resistance    .92810

 

March 19 Canadian Dollar

Support    .75360        Resistance    .75640

 

March 19 Australian Dollar

Support    .7163          Resistance    .7224

 

March 19 Thirty Year Treasury Bonds

Support    144^6         Resistance    145^20

 

February 19 Gold

Support    1285.0        Resistance    1300.0

 

March 19 Copper

Support    2.6350        Resistance    2.6850

 

February 19 Crude Oil

Support    51.33          Resistance    52.77


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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