By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures are higher following reports of progress in the U.S.-China trade talks. U.S. Treasury Secretary Steven Mnuchin said he held “constructive” discussions in Beijing, which concludes the latest round of talks. There will be another round in Washington next week.
Personal consumption expenditures increased 0.1% in January from the prior month, which compares to expectations of a 0.3% rise.
The 8:45 central time March Chicago PMI is expected to be 60.3.
There are two 9:00 reports. The February new home sales report is anticipated to be 615,000 and March consumer sentiment is estimated to be 97.8.
In spite of a slowing global economy, the S&P 500 has gained 12.3% so far this quarter, which would mark its best quarterly performance since September 2009.
My view is that the reflation story remains on track and easier credit conditions from most of the world’s central banks are coming and will be the dominant fundamental that supports stock index futures in the long term.
The U.S. dollar is lower and the euro currency is higher on news that the German jobless rate fell to a record low.
In the longer term view, interest rate differential expectations offer no clear advantage to either the U.S. dollar or the euro currency, since the Federal Reserve and the European Central Bank are both likely to move toward accommodation this year.
The Canadian dollar and the Australian dollar are higher due to strong gains in crude oil futures, which today advanced to a four month high.
There was additional support for the currency of Canada on news that the Canadian economy expanded 0.3% in January, beating expectations.
Also, Canada's industrial product price index rose 0.3% in February, following a 0.3% decline in January.
Futures are lower as a result of upbeat talk on U.S.-China trade.
Federal Reserve speakers today are New York Federal Reserve Bank President John Williams 8:25, Dallas Federal Reserve Bank President Robert Kaplan at 9:30 and Federal Reserve Board Vice Chairman for Supervision Randal Quarles at 11:05.
Financial futures are predicting there is a 52% probability that Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its September 11 policy meeting.
The better tone to the U.S.-China trade talks caused the inverted U.S. yield curve to become less inverted today.
I believe that once a U.S.-China trade agreement is made the yield curve, after a while, will move back to normal.
June 19 S&P 500
Support 2817.00 Resistance 2846.00
June 19 U.S. Dollar Index
Support 96.430 Resistance 96.960
June 19 Euro Currency
Support 1.12760 Resistance 1.13370
June 19 Japanese Yen
Support .90600 Resistance .91110
June 19 Canadian Dollar
Support .74480 Resistance .75210
June 19 Australian Dollar
Support .7080 Resistance .7125
June 19 Thirty Year Treasury Bonds
Support 149^0 Resistance 150^4
June 19 Gold
Support 1288.0 Resistance 1311.0
May 19 Copper
Support 2.8700 Resistance 2.9550
May 19 Crude Oil
Support 59.32 Resistance 60.89
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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