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Stock Index Futures Trade Higher

by Archer Financial Services | Feb 04, 2019

By Alan Bush | Senior Financial Economist at ADMIS   
  

STOCK INDEX FUTURES

S&P 500 and Dow futures advanced on Friday due to the on-balance stronger than expected U.S. employment report, which showed nonfarm payrolls jumped by 304,000 jobs last month. This exceeded forecasts and was the largest gain since February 2018.

The 9:00 central time November factory orders report is expected to show a .2% decline.

Stock index futures have been performing better than the news would suggest, which should be viewed as a sign of strength.

 

CURRENCY FUTURES

Although the U.S. dollar is higher today, it has underperformed the news recently. For example, the greenback closed slightly lower on Friday in spite of the much larger than anticipated increase in nonfarm payrolls.

The euro currency is lower due to cautious comments from the European Central Bank at its January policy meeting, which reaffirmed worries that the euro zone economy is struggling. 

In addition, there was pressure on the euro on news that December producer prices in the euro zone fell 0.8% on the month when a decline of .7% was estimated.  

Concerns about Brexit weighted on the British pound.

The Bank of England is scheduled to meet this Thursday and is widely expected to keep interest rates unchanged.

The Canadian dollar and Australiana dollar are lower in response to weaker crude oil prices. 

Longer term, the Canadian dollar and the Australian dollar should trend higher, as industrial commodity prices are likely to increase in price.

 

INTEREST RATE MARKET FUTURES

Futures fell on Friday as a result of the nonfarm payrolls report with follow-through weakness today.

Financial futures markets are predicting an 86% probability that the fed funds rate will remain unchanged at the current level of 2.25%-2.50% this year.

There is a 3% chance of an increase in the fed funds rate by 25 basis points, and there is an 11% probability of a 25 basis point rate cut in 2019.

Cleveland Federal Reserve Bank President Loretta Mester will deliver a speech on the economic outlook and monetary policy 6:30 this evening.

Futures will probably drift lower, as optimism for a U.S.-China trade deal is likely to increase.

 

SUPPORT AND RESISTANCE

March 19 S&P 500

Support    2694.00      Resistance    2713.00

 

March 19 U.S. Dollar Index

Support    95.250        Resistance    95.690

 

March 19 Euro Currency

Support    1.14640      Resistance    1.15050

 

March 19 Japanese Yen

Support    .91030        Resistance    .91770

 

March 19 Canadian Dollar

Support    .76110        Resistance    .76550

 

March 19 Australian Dollar

Support    .7209          Resistance    .7268

 

March 19 Thirty Year Treasury Bonds

Support    145^0         Resistance    146^80

 

April 19 Gold

Support    1310.0        Resistance    1328.0

 

March 19 Copper

Support    2.7500        Resistance    2.7850

 

March 19 Crude Oil

Support    53.90          Resistance    55.88

 


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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