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U.S. Stock Index Futures Higher for Sixth Day

by Archer Financial Services | Jun 11, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures are higher for a sixth day after China announced new stimulus measures to support the world's second largest economy.

U.S. stock index futures are closing in on their all-time highs as interest rates decline.

However, a limiting factor is the ongoing trade tensions between the U.S. and China.

The index of small business optimism from the National Federation of Independent Business increased to 105.0 in May when economists had forecast 102.0.

The producer price index advanced a seasonally adjusted 0.1% in May from a month earlier and food and energy categories increased 0.2% from the prior month. Both readings matched economists’ expectations.  

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.

CURRENCY FUTURES

The U.S. dollar firmed when the better than expected National Federation of Independent Business report was released.

The British pound strengthened following the release of U.K. labor market data.

The Canadian dollar is higher due to stronger crude oil prices.

INTEREST RATE MARKET FUTURES

Higher stock index futures and the better than anticipated National Federation of Independent Business report put mild pressure on prices.

The Treasury will auction three year notes today.

Traders continue to believe the Federal Reserve will be forced to cut interest rates to boost economic growth.

Financial futures markets are predicting there is a 79% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its July 31 policy meeting. The probability yesterday was 84%. Another rate cut is likely in December. 

With the U.S.-China trade dispute apparently far from a resolution, the flight to quality vehicles, especially the thirty year Treasury bond futures are likely to trend higher. 

 

SUPPORT AND RESISTANCE

June 19 S&P 500

Support    2882.00      Resistance    2915.00

June 19 U.S. Dollar Index

Support    96.580        Resistance    96.910

June 19 Euro Currency

Support    1.13030      Resistance    1.13440

June 19 Japanese Yen

Support    .91900        Resistance    .92420

June 19 Canadian Dollar

Support    .75280        Resistance    .75550

June 19 Australian Dollar

Support    .6944          Resistance    .6976

September 19 Thirty Year Treasury Bonds

Support    152^24       Resistance     153^22

August 19 Gold

Support    1322.0        Resistance     1338.0

July 19 Copper

Support    2.6550        Resistance     2.7100

July 19 Crude Oil

Support    53.07          Resistance     54.34


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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