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FOMC Statement at 1:00

by Archer Financial Services | May 01, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures jumped due to better than expected corporate earnings reports with S&P 500 futures advancing to a new record high.

Hopes for a resolution to the U.S.-China trade dispute, better than expected earnings and a dovish Federal Reserve powered the rally in stock index futures this year.  

According to the Automatic Data Processing employment change report, 275,000 workers were added in April, which is the biggest monthly gain since last July and exceeds analysts' forecast of an increase of 180,000.

The 8:45 central time April PMI manufacturing index is expected to be 52.4.

There are two 9:00 reports. The April Institute for Supply Management manufacturing index is anticipated to be 55 and the March construction spending report is estimated to be up .2%.

Today is the second day of the two-day Federal Open Market Committee meeting. A statement will be released at 1:00 and Fed Chair Jerome Powell will give a press conference at 1:30. No change in the fed funds rate is expected.

This week is another busy week for earnings reports with approximately 160 S&P 500 companies reporting.  Analysts are now more optimistic on first quarter earnings growth at S&P 500 companies and expect a 0.7% increase compared with a 2% decline that was estimated at the beginning of April, according to Refinitiv data.

My view remains that the global reflation scenario is 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 was under pressure in the overnight trade, but received some support from the stronger than expected ADP employment change report.

The British pound extended its rally to reach a new two-week high, supported by growing optimism that the Conservative and Labour parties can break the Brexit deadlock in their discussions over how to leave the E.U.

The Canadian dollar and the Australian dollar are lower due to weaker crude oil prices.

 

INTEREST RATE MARKET FUTURES

The better than anticipated ADP employment report put pressure on futures at the front of the curve.

Financial futures are predicting there is a 66% 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 60%.

 

SUPPORT AND RESISTANCE

June 19 S&P 500

Support    2948.00      Resistance    2965.00

 

June 19 U.S. Dollar Index

Support    97.010        Resistance    97.350

 

June 19 Euro Currency

Support    1.12480      Resistance    1.12950

 

June 19 Japanese Yen

Support    .89840        Resistance    .90250

 

June 19 Canadian Dollar

Support    .74560        Resistance    .74920

 

June 19 Australian Dollar

Support    .7037          Resistance    .7077

 

June 19 Thirty Year Treasury Bonds

Support    147^4         Resistance     148^6

 

June 19 Gold

Support    1277.0        Resistance    1288.0

 

July 19 Copper

Support    2.8400        Resistance    2.9300

  

June 19 Crude Oil

Support    63.03          Resistance    64.33


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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