By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures are higher due to a slightly better tone to the U.S.-China trade situation.
President Donald Trump repeated previous reports that he would meet with China's President Xi in June at the G-20 meeting, which boosted hopes for progress in the U.S.-China trade talks.
Orders for durable goods in April, which are products that are designed to last at least three years, fell 2.1% from the prior month. Economists had expected a 2.0% drop in the month.
My view remains that the global reflation scenario is on track and easier credit conditions from most of the world’s central banks, including the Federal Reserve, are coming and will be the dominant fundamental that supports stock index futures in the long term.
But, first we need to get past the U.S.-China trade hurdle.
Now is a good time to focus on the long side of flight to quality vehicles, especially the thirty year Treasury bond futures.
Yesterday the U.S. dollar index hit its highest level since June 2017. Today the greenback is lower as some flight to quality longs are liquidated.
After a record 14 days of consecutive declines, the British pound is higher today after U.K. Prime Minister Theresa May announced her resignation.
U.K. retail sales were unchanged in April after several months of strong growth. The figures were better than economists were expecting.
Yesterday the thirty year Treasury bond futures advanced to the highest level since February 2018.
Futures are lower today due to optimistic comments on trade made by President Trump.
Financial futures markets are predicting there is a 62% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its October 30 policy meeting.
I expect the flight to quality vehicles, especially the thirty year Treasury bond futures, to trade higher in this atmosphere of U.S.-China trade uncertainties.
June 19 S&P 500
Support 2818.00 Resistance 2844.00
June 19 U.S. Dollar Index
Support 97.480 Resistance 97.820
June 19 Euro Currency
Support 1.11910 Resistance 1.12340
June 19 Japanese Yen
Support .91200 Resistance .91580
June 19 Canadian Dollar
Support .74140 Resistance .74500
June 19 Australian Dollar
Support .6877 Resistance .6928
June 19 Thirty Year Treasury Bonds
Support 150^24 Resistance 151^10
June 19 Gold
Support 1278.0 Resistance 1288.0
July 19 Copper
Support 2.6800 Resistance 2.7100
July 19 Crude Oil
Support 57.93 Resistance 59.13
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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