By Alan Bush | Senior Financial Economist at ADMIS
President Donald Trump and China’s President Xi Jinping are scheduled to hold trade talks on the sidelines of a Group of 20 summit this weekend in Japan.
President Trump today said he hoped for productive talks with President Xi, but said he did not make any promises about a reprieve from increasing trade tariffs.
Personal income in May was up .5% when a gain of .3% was expected and consumer spending increased .4%, as expected.
The 8:45 central time June Chicago PMI is expected to be 53.6 and the 9:00 June consumer sentiment index is anticipated to be 97.9.
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 euro currency is higher after core inflation gauges in the euro zone held firm in June with the currency of the euro zone on track for its biggest monthly advance in 17 months.
Overall inflation held steady as expected at 1.2% in June, while the “core” figure, which excludes volatile food and energy prices, jumped to 1.2% from 1.0% in May.
The British pound is higher after a report showed U.K. households extended their record borrowing streak in the first quarter.
In addition, the U.K. economy grew at an annualized rate of 2.0% in the first quarter, which was unrevised from an earlier estimate.
The Canadian dollar is higher on news that Canada's gross domestic product increased 0.3% in April from the previous month. Market expectations were for a 0.1% gain.
San Francisco Federal Reserve Bank President Mary Daly will speak at 2:20 this afternoon.
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 and possibly a third rate cut is anticipated by financial futures markets later this year.
In the longer term, higher prices are likely for futures as most major central banks are likely to embark on a new round of accommodation.
It is probably a good time to limit positions over the weekend in light of the uncertain outlook for the U.S.-China trade talks.
September 19 S&P 500
Support 2927.00 Resistance 2946.00
September 19 U.S. Dollar Index
Support 95.500 Resistance 95.850
September 19 Euro Currency
Support 1.14230 Resistance 1.14700
September 19 Japanese Yen
Support .93200 Resistance .93570
September 19 Canadian Dollar
Support .76370 Resistance .76770
September 19 Australian Dollar
Support .7010 Resistance .7042
September 19 Thirty Year Treasury Bonds
Support 154^0 Resistance 155^26
August 19 Gold
Support 1408.0 Resistance 1429.0
September 19 Copper
Support 2.7000 Resistance 2.7350
August 19 Crude Oil
Support 58.95 Resistance 59.97
For more information about these markets, please contact Alan at 312.242.7911 or via email at email@example.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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