By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures advanced due to the very likely possibility that the Federal Open Market Committee will lower its fed funds rate at the conclusion of its policy meeting today. In addition, upbeat corporate earnings supported futures.
The U.S.-China trade talks concluded today without any major breakthrough and the Chinese commerce ministry said the two sides will meet again in the U.S. in September.
The July Automatic Data Processing employment change report showed an increase of 156,000 private sector jobs. Economists had forecast a gain of 155,000.
Compensation for U.S. workers increased more slowly in the second quarter. The employment-cost index, which is a measure of wages and benefits for civilian workers, increased 0.6% in the second quarter. The median estimate called for a gain of 0.7%.
The 8:45 central time Chicago PMI is expected to be 50.5.
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.
After the U.S. dollar advanced to a two-month high yesterday, the greenback is a little lower today.
Economic growth in the euro area slowed in the second quarter. The latest data shows economic growth in the 19-nation region expanded 0.2% in the last quarter, which is down from 0.4% growth in the previous three months.
The Canadian dollar advanced on news that Canadian economic output increased for a third straight month in May. Canada's gross domestic product climbed 0.2% in May from the previous month. Market expectations were for a 0.1% gain.
Today is the second day of the two-day Federal Open Market Committee meeting.
The Federal Open Market Committee will release a statement at 1:00 and Fed Chair Powell will hold a press conference at 1:30.
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. A second and possibly a third rate cut is anticipated by financial futures markets before the end of this year.
A rate cut from the Federal Reserve today would be the first reduction since 2008.
In the longer term, higher prices are likely for futures, as most major central banks are likely to embark on a new round of easier credit policies.
September 19 S&P 500
Support 3001.00 Resistance 3031.00
September 19 U.S. Dollar Index
Support 97.610 Resistance 97.990
September 19 Euro Currency
Support 1.11700 Resistance 1.12170
September 19 Japanese Yen
Support .92200 Resistance .92600
September 19 Canadian Dollar
Support .76000 Resistance .76440
September 19 Australian Dollar
Support .6866 Resistance .6923
September 19 Thirty Year Treasury Bonds
Support 154^12 Resistance 155^10
August 19 Gold
Support 1423.0 Resistance 1442.0
September 19 Copper
Support 2.6650 Resistance 2.7000
September 19 Crude Oil
Support 57.87 Resistance 59.21
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.