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S&P 500 and Dow Futures at Record Highs

by Archer Financial Services | Feb 06, 2020

By Alan Bush | Senior Financial Economist at ADMIS   

 

STOCK INDEX FUTURES

Stock index futures are higher for a fourth day with S&P 500 and Dow futures advancing to record highs in the overnight trade. Much of the strength is linked to news that China said it will lower levies on $75 billion of U.S. goods next week. 

Jobless claims in the week ended February 1 were 202,000 when 215,000 were expected.

U.S. nonfarm productivity was up 1.4% when an increase of 1.5% was anticipated.

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 advanced to a nine week high 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 U.S. jobless claims report, which was less than estimated. 

The euro currency gained on news that Germany’s construction sector expanded at the fastest pace in 10 months in January and was the second fastest over the last two years.

The construction Purchasing Managers' Index increased to 54.9 in January from 53.8 in December.

INTEREST RATE MARKET FUTURES

Futures are lower, as flight to quality longs are liquidated, in light of advancing stock index futures.

There was additional pressure on futures when the smaller than expected U.S. jobless claims report was released.

Federal Reserve speakers today are Robert Kaplan at 8:15 and Randal Quarles at 6:15 PM.

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 62% probability that the Federal Open Market Committee will lower its fed funds rate at its September 16, 2020 policy meeting.  Yesterday the probability was 63%.

I will be out of the office on Friday, February 7th.

SUPPORT AND RESISTANCE

March 20 S&P 500

Support    3330.00      Resistance    3363.00

March 20 U.S. Dollar Index

Support    98.030        Resistance    98.280

March 20 Euro Currency

Support    1.10130      Resistance    1.10420

March 20 Japanese Yen

Support    .91040        Resistance    .91330

March 20 Canadian Dollar

Support    .75160        Resistance    .75400

March 20 Australian Dollar

Support    .6736          Resistance    .6774

March 20 Thirty Year Treasury Bonds

Support    160^10       Resistance     161^20

April 20 Gold

Support    1553.0        Resistance     1575.0

March 20 Crude Oil

Support    50.34          Resistance     52.30

March 20 Copper

Support    2.5750        Resistance     2.6250



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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