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U.S. GDP as Expected

by Archer Financial Services | Jun 27, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

Traders are looking ahead to the upcoming G-20 meeting in Osaka, Japan on Friday and Saturday, where President Donald Trump and China’s President Xi are scheduled to hold trade talks. 

The U.S. gross domestic product increased 3.1% the second quarter, which was as expected. The rate of growth in the first quarter was much stronger than the 2.2% pace in the fourth quarter of last year. Economists are predicting growth is slowing in the second quarter of this year.

Initial jobless claims increased 10,000 to 227,000 in the week ended June 22 when economists expected 219,000 new claims last week.  

The 9:00 central time May pending home sales index is expected to be up .6% and the 10:00 June Kansas City Federal Reserve manufacturing index is anticipated to be 3.

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 euro currency is steady following mixed economic reports.     

Euro zone manufacturers were at their most downbeat in nearly six years in June.  An economic sentiment indicator fell to 103.3 from 105.2 in May, which is the lowest level since August 2016.

However, German consumer prices increased faster than expected in June.  Consumer prices rose 0.3% on month in June and 1.6% on year, which is higher than economists’ expectations of a gain of 0.1% on month and 1.4% on year.  
 

INTEREST RATE MARKET FUTURES

The Treasury will auction seven year notes today.

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. A July rate cut would be the first reduction in a decade. A second rate cut is likely later this year.

Higher prices are likely for futures as most major central banks are likely to embark on a new round of accommodation.
 

SUPPORT AND RESISTANCE

September 19 S&P 500

Support    2911.00      Resistance    2940.00

September 19 U.S. Dollar Index

Support    95.600        Resistance    95.97

September 19 Euro Currency

Support    1.14120      Resistance    1.14620

September 19 Japanese Yen

Support    .92900        Resistance    .93500

September 19 Canadian Dollar

Support    .76170        Resistance    .76400

September 19 Australian Dollar

Support    .6995          Resistance    .7027

September 19 Thirty Year Treasury Bonds

Support    154^12       Resistance     155^20

August 19 Gold

Support    1400.0        Resistance     1418.0

September 19 Copper

Support    2.6950        Resistance     2.7350

August 19 Crude Oil

Support    58.34          Resistance     59.55



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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