By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures advanced sharply after the Federal Reserve yesterday indicated it is ready to lower interest rates as soon as next month to offset the growing risks to global and U.S. economic growth.
The S&P 500 and the Dow Jones Industrial Average added to gains and are only 0.6% away from their record high closes.
Initial jobless claims decreased 6,000 to a seasonally adjusted 216,000 in the week ended June 15. Economists had expected 220,000 new claims.
The Philadelphia Federal Reserve June business index was 0.3, which compares to the estimate of 9.3.
The 9:00 central time May leading indicators index is expected to be up .1%.
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.
The U.S. dollar posted its largest 2-day drop in a year due to yesterday’s dovish Federal Open Market Committee policy statement.
The British pound is higher after the Bank of England left its benchmark interest rate unchanged, as it warned that rising trade tensions cloud the outlook for the global economy.
The Japanese yen is higher even though the Bank of Japan maintained its ultra-loose monetary policy as trade tensions darken the global economic outlook.
The 30 year Treasury bond futures advanced to their highest level since October 2017.
The Federal Open market Committee agreed to hold steady their benchmark interest rate on Wednesday, but hinted it would reduce rates in the months ahead if the economic outlook weakens.
Nine of the 10 members of the rate-setting committee voted to maintain the federal funds rate in a range of between 2.25% and 2.50%. St. Louis Federal Reserve Bank President James Bullard dissented in favor of cutting rates.
Financial futures markets are predicting there is almost a 100% 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. Yesterday the probability was 89%. A July rate cut would be the first reduction in a decade.
Longer term, higher prices are likely for the interest rate futures market in light of a coming new round of central bank easing of credit.
September 19 S&P 500
Support 2927.00 Resistance 2970.00
September 19 U.S. Dollar Index
Support 96.000 Resistance 96.730
September 19 Euro Currency
Support 1.13030 Resistance 1.13980
September 19 Japanese Yen
Support .93020 Resistance .93750
September 19 Canadian Dollar
Support .75360 Resistance .76270
September 19 Australian Dollar
Support .6893 Resistance .6966
September 19 Thirty Year Treasury Bonds
Support 155^0 Resistance 156^24
August 19 Gold
Support 1358.0 Resistance 1403.0
September 19 Copper
Support 2.6900 Resistance 2.7450
August 19 Crude Oil
Support 54.28 Resistance 56.89
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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This is not a solicitation of any order to buy or sell, but merely a collection of information related to Archer Financial services and commodities trading provided by Archer Financial services. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor do they purport to be complete. No responsibility is assumed with respect to any such element, nor with respect to any expression of opinion herein contained.
The risk of loss in trading futures and options on futures can be substantial. Each investor must carefully consider whether this type of investment is appropriate for them. Past performance is not necessarily indicative of future results.