By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures are higher after China’s Commerce Ministry said its trade team will hold talks with its U.S. counterparts in mid-September in preparation for high level negotiations in the first part of October.
The talks were agreed to in a phone conversation between Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, according to China’s commerce ministry.
The August Automatic Data Processing employment change report showed the nation’s businesses created 195,000 private-sector jobs in August, which compares to the estimate of a gain of 150,000. The August number was above the highest analyst estimate.
Initial weekly U.S. jobless claims increased 1,000 to 217,000 in the week ended August 31. Consensus expectations had called for initial claims to be 215,000.
The 8:45 central time August PMI services index is expected to be 50.9.
There are two 9:00 reports. The July factory orders report is anticipated to show a 1.0% increase and the August Institute for Supply Management non-manufacturing index is estimated to be 54.
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 index is lower in spite of the bullish Automatic Data Processing employment change report.
The euro currency is higher despite news that Germany's factory orders decreased by the most in five months in July. Factory orders fell 2.7% when economists had forecast orders to drop 1.4%.
Futures are lower across the board as flight to quality vehicles are liquidated in light of a more optimistic outlook for progress in the U.S.-China trade talks.
Yesterday’s release of the Federal Reserve’s Beige Book, which is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee, showed most U.S. businesses remain optimistic about their prospects in spite of concerns about tariffs and trade policy, as the U.S. economy continues to grow.
On Friday, Federal Reserve Chairman Jerome Powell will deliver a speech entitled “Economic Outlook and Monetary Policy” at the University of Zurich in Zurich, Switzerland at 11:30 AM.
Market participants believe there is almost a 100% probability that the Federal Open Market Committee will lower its fed funds rate by another 25 basis points at its next meeting on September 17-18. Another rate cut after that is likely before the end of the year.
In the longer term, higher prices are likely for futures, especially at the long end of the curve, as most major central banks, including the Federal Reserve, are likely to embark on a new round of easier credit policies.
All of the safe haven vehicles are lower in light of the overnight news of planned U.S.-China trade talks later this month and in October. I expect prices will at least partially recover this afternoon from the morning lows for the interest rate futures market, gold, silver and the Japanese yen.
September 19 S&P 500
Support 2933.00 Resistance 2974.00
September 19 U.S. Dollar Index
Support 98.030 Resistance 98.580
September 19 Euro Currency
Support 1.10150 Resistance 1.10880
September 19 Japanese Yen
Support .93510 Resistance .94170
September 19 Canadian Dollar
Support .75500 Resistance .75890
September 19 Australian Dollar
Support .6790 Resistance .6834
December 19 Thirty Year Treasury Bonds
Support 164^8 Resistance 165^28
December 19 Gold
Support 1536.0 Resistance 1562.0
December 19 Copper
Support 2.5850 Resistance 2.6500
October 19 Crude Oil
Support 55.75 Resistance 57.21
Would you like to open an account with us? Go to our interactive New Account application at Open an Account. It is fast, saves on postage and it’s green.
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.
Contact Us Today
Get free guides and special offers in the Resource Center.
© 2018 Archer Financial Services, Inc.
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.