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NASDAQ Futures at Record Highs

by Archer Financial Services | Feb 05, 2020

By Alan Bush | Senior Financial Economist at ADMIS   

 

STOCK INDEX FUTURES

Stock index futures are higher for a third day with NASDAQ futures reaching new record highs yesterday and today. Much of the strength appears to be due to optimism around coronavirus treatments.

There are reports of medical breakthroughs in the fight against the coronavirus. However, the World Health Organization played down the reports, saying “There are no known effective therapeutics against this virus.”

The Automatic Data Processing employment change report showed 291,000 private-sector jobs were created in January, which is the largest gain in four years. This was well above forecasts from economists of a gain of 154,000.

The 8:45 central time January PMI services index is expected to be 53.2 and the 9:00 January Institute for Supply Management nonmanufacturing index is anticipated to be 55.2.

In spite of the negative impact of the coronavirus, I anticipate U.S. stock index futures prices will end up higher in the first quarter.

CURRENCY FUTURES   

The U.S. dollar is higher against most currencies on the belief that the Federal Reserve will be less aggressive in adding more accommodation to the banking system than other major central banks.

The greenback was also supported by the Automatic Data Processing employment change report and news that the U.S. trade deficit narrowed in 2019 for first time in six years.

The Canadian dollar is higher due to a report that showed Canada recorded a smaller trade deficit with the rest of the world in December. 
 
The Australian dollar is higher in response to reports of medical breakthroughs in the fight against the coronavirus, which boosted economic growth-linked currencies.

INTEREST RATE MARKET FUTURES

Futures are lower, as flight to quality longs are liquidated, following advancing stock index futures and reports that researchers had made progress in developing cures and treatments for the rapidly spreading coronavirus.

There was additional pressure on futures when the stronger than estimated Automatic Data Processing employment change report was released.

Lael Brainard of the Federal Reserve will speak at 3:10.

In light of the negative impact of the coronavirus on global economic growth, major central banks will come under pressure to add more accommodation.

However, the perceived need for more accommodation has receded over the past few days.

Based on financial futures markets, currently there is a 63% probability that the Federal Open Market Committee will lower its fed funds rate at its September 16, 2020 policy meeting. 

SUPPORT AND RESISTANCE

March 20 S&P 500

Support    3285.00      Resistance    3338.00

March 20 U.S. Dollar Index

Support    97.700        Resistance    98.200

March 20 Euro Currency

Support    1.10240      Resistance    1.10800

March 20 Japanese Yen

Support    .91160        Resistance    .91750

March 20 Canadian Dollar

Support    .75130        Resistance    .75440

March 20 Australian Dollar

Support    .6723          Resistance    .6785

March 20 Thirty Year Treasury Bonds

Support    160^24       Resistance     162^24

April 20 Gold

Support    1549.0        Resistance     1573.0

March 20 Crude Oil

Support    49.39          Resistance     51.75

March 20 Copper

Support    2.5400        Resistance     2.6100



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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