By Alan Bush | Senior Financial Economist at ADMIS
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.
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.
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.
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
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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.