header_img

US Bank Earnings Propel Stock Index Futures Higher

by AFS Archer Financial Svcs | Apr 12, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures got a boost from stronger Chinese trade data, which showed a substantial recovery in exports.  Exports increased 14.2% in March over the same month last year after a large decline in January and February. In addition, Chinese lending was substantially higher. 

There were follow-through gains when major U.S. banks kicked off the first quarter earnings season with strong numbers.  

U.S. import prices were up 0.6% in March from the previous month when economists predicted an increase of a 0.5%.    

The 9:00 central time April consumer sentiment index is expected to be 98.

My view is that the global 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.

CURRENCY FUTURES

The U.S. dollar is lower in spite of mostly bullish news, including the better than anticipated earnings reports from major U.S. banks. 

The euro currency is higher after news that euro zone industrial production fell 0.2% in March, which was better than the 0.5% decrease expected by economists. 

The euro is higher even though Bundesbank president Jens Weidmann said Germany's economy, the largest in the euro zone, could grow by less than 1% this year as trade disputes and Brexit uncertainty weighs on investment.

The British pound is higher after British finance minister Philip Hammond said he expects a Brexit agreement in the next couple of months. 

Higher crude oil prices supported the Canadian dollar and the Australian dollar. 

INTEREST RATE MARKET FUTURES  

Treasury yields increased and futures declined after the stronger-than-expected increase in China's exports helped to dampen global growth fears.

Federal Reserve Chairman Jerome Powell will speak again today on the economy at the House of Representatives Democrat’s three day annual retreat in Leesburg, Virginia.

Financial futures are predicting there is a 40% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its December 11 policy meeting. Yesterday the probability was 49%.

For more information about these markets, please contact Alan at 312.242.7911  or via email at alan.bush@admis.com. Thank you.

Would you like to open an account with us? Go to our interactive New Account application at Open an Account. It is fast, saves on postage and it’s green.

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.

Offers