By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures fell due to a series of weak economic reports in the euro zone. Euro zone purchasing managers indexes came in below expectations, dragged down by weak performances in Germany and France.
The 8:45 central time U.S. March PMI Composite FLASH is expected to be 55.2.
The 9:00 February existing home sales report is anticipated to show 5.1 million and the 9:00 January wholesale trade report is estimated to be up .1%.
I expect at least a partial recovery for stock index futures from the current lower levels.
Stock index futures have moved higher since late last year in spite the reduced rate of global economic expansion.
I believe investors are correctly anticipating easier credit conditions from the world’s central banks are and will continue to be the dominant fundamental that supports stock index futures.
The U.S. dollar advanced and the euro currency fell following a round of disappointing economic data in the euro zone.
The euro zone manufacturing preliminary purchasing managers index fell to 51.3 in March from 51.9 in February, which was a worse drop than expected. In Germany, the euro zone’s largest economy, the manufacturing PMI for March was 44.7, which was weaker than expected.
The British pound advanced on news that late Thursday, European Union leaders allowed U.K. Prime Minister Theresa May to postpone the Brexit deadline beyond next week.
The Canadian dollar is lower on news that Canadian retail sales fell for a third consecutive month in January. Statistics Canada said retail sales decreased 0.3% in January from the previous month. Market expectations were for a 0.4% increase.
However, inflation in Canada rose in February at a slightly faster than expected rate. Canada's consumer price index climbed 1.5% on a year over year basis in February, which is up from a 1.4% gain in the previous month. Market expectations were for a 1.4% increase in February.
Global bond markets rallied, sending yields lower, as a result of a series of weaker than expected euro zone data prompted investors to move into the perceived safety of government paper.
The yield for the 10 year German government bond fell 4.7 basis points to negative 0.01%, which is its lowest in almost two and a half years. In addition, the 10 year Japanese government bond yield also fell to negative 0.07%, which is its lowest level since November 2016.
Federal Reserve speakers today are Atlanta Federal Reserve Bank President Raphael Bostic at 8:30 and Chicago Federal Reserve Bank President Charles Evans at 8:45.
Financial futures markets are predicting there is a 54% probability that the fed funds rate will remain unchanged at the current level of 2.25%-2.50% this year. There is a 46% chance for a 25 basis point or more decline in the fed funds rate in 2019.
June 19 S&P 500
Support 2837.00 Resistance 2868.00
June 19 U.S. Dollar Index
Support 95.620 Resistance 96.350
June 19 Euro Currency
Support 1.13570 Resistance 1.14810
June 19 Japanese Yen
Support .90710 Resistance .91360
June 19 Canadian Dollar
Support .74520 Resistance .75150
June 19 Australian Dollar
Support .7091 Resistance .7139
June 19 Thirty Year Treasury Bonds
Support 147^0 Resistance 148^12
April 19 Gold
Support 1304.0 Resistance 1318.0
May 19 Copper
Support 2.8600 Resistance 2.9250
May 19 Crude Oil
Support 58.91 Resistance 60.55
For more information about these markets, please contact Alan at 312.242.7911 or via email at firstname.lastname@example.org. 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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