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Focus is on U.S.-China Trade Talks this Week

by Archer Financial Services | Feb 11, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures advanced as the latest trade talks between the U.S. and China began in Beijing.

These talks will begin with working level discussions from Monday through Wednesday. Higher principal level discussions will take place Thursday and Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

Some analysts are becoming more upbeat that a deal can be reached by the March 1 deadline.    

With fourth quarter earnings season nearing an end, 71.5% of the S&P 500 companies that have reported results have topped profit estimates, according to data from Refinitiv.

Stock index futures have been performing better than the news would suggest since the lows were made in late December.

  

CURRENCY FUTURES

The U.S. dollar advanced again by default due to weaker economic data from Europe.

The British pound fell on news that the U.K. economy expanded at its slowest annual rate in six years in 2018.

Economic growth in the U.K. last year was 1.4%, which is down from 1.8% in 2017. 

This is another example of a series of downbeat economic reports coming out of Europe.

 

INTEREST RATE MARKET FUTURES

Flight to quality longs are being liquidated due to optimism that progress will be made in the U.S.-China trade talks this week.

Financial futures markets are predicting a 79% probability that the fed funds rate will remain unchanged at the current level of 2.25%-2.50% this year.

There is a 20% chance of reduction in the fed funds rate by 25 basis points in 2019 and there is a 1% probability of a 25 basis point increase this year.

The thirty year Treasury bond futures have remained in a broad trading range since the first week in January. A U.S.-China trade agreement, or hint of one, would be the catalyst to take futures lower.

 

SUPPORT AND RESISTANCE

March 19 S&P 500

Support    2700.00      Resistance    2728.00

 

March 19 U.S. Dollar Index

Support    96.360        Resistance    96.710

 

March 19 Euro Currency

Support    1.13210      Resistance    1.13710

 

March 19 Japanese Yen

Support    .90730        Resistance    .91450

 

March 19 Canadian Dollar

Support    .75190        Resistance    .75550

 

March 19 Australian Dollar

Support    .7063          Resistance    .7120

 

March 19 Thirty Year Treasury Bonds

Support    146^0         Resistance    146^30

 

April 19 Gold

Support    1303.0        Resistance    1319.0

 

March 19 Copper

Support    2.7700        Resistance    2.8250

 

March 19 Crude Oil

Support    51.34          Resistance    52.88


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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