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Stock Index Futures at Record Highs

by Archer Financial Services | Jul 15, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

S&P 500, Dow Jones and NASDAQ futures advanced to record highs today on limited news.

Much of the recent gains can be linked to Federal Reserve Chairman Jerome Powell’s congressional testimony last week, which set the stage for the central bank to lower interest rates.

The Federal Reserve of New York's monthly report showed business activity in the manufacturing sector in the New York area in July expanded at a faster pace than expected with the headline Empire State Manufacturing Index jumping to 4.3 in July from -8.6 in June. Economists had expected a reading of 0.8.

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 index is a little higher and the euro currency is slightly lower even though interest rate differential expectations have turned slightly bearish for the greenback in light of Fed Chair Powell’s dovish congressional testimony last week.

The British pound is lower on news that U.K. house prices declined for the first time this year in July.

The Canadian dollar and the Australian dollar are higher in light of higher crude oil prices.

INTEREST RATE MARKET FUTURES

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 30-31 policy meeting. A second 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.

GOLD

Futures appear to be building a symmetrical triangle congestion pattern on the daily chart. The rule of thumb is that prices come out of a congestion pattern in the same direction that they came into the pattern approximately 60% to 65% of the time.

Higher prices are likely for gold futures in the long term.

SUPPORT AND RESISTANCE

September 19 S&P 500

Support    3005.00      Resistance    3027.00

September 19 U.S. Dollar Index

Support    96.310        Resistance    96.590

September 19 Euro Currency

Support    1.13110      Resistance    1.13450

September 19 Japanese Yen

Support    .92880        Resistance    .93290

September 19 Canadian Dollar

Support    .76700        Resistance    .76950

September 19 Australian Dollar

Support    .7021          Resistance    .7058

September 19 Thirty Year Treasury Bonds

Support    153^0         Resistance     154^4

August 19 Gold

Support    1408.0        Resistance     1423.0

September 19 Copper

Support    2.6800        Resistance     2.7300

August 19 Crude Oil

Support    59.73          Resistance     61.13

 



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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