By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures were limit down in the overnight trade after the CDC indicated the likely time for the cases of the coronavirus to peak may take longer than previously hoped.
Stocks markets globally fell even after the Federal Reserve slashed its benchmark interest rate to close to zero, as investors remained concerned that the emergency measures may not be sufficient to ward off a recession, as a result of the coronavirus pandemic. The Fed also said it would buy at least $500 billion of Treasuries and $200 billion of mortgage-backed securities over the coming months, starting today.
Also, the International Money Fund said it has $1 trillion in loan capacity ready to put to work to alleviate the economic damage caused by the outbreak.
The March U.S. Empire Federal Reserve index was -21.5 when +4.9 was expected.
While traders focus on the negative bearish influence of the coronavirus, and rightly so, it will be the bullish impact of substantially easier credit from the world’s central banks that will dominate in the long term.
The U.S. dollar index is lower after the Federal Reserve slashed interest rates.
The flight to quality Japanese yen is sharply higher. The Bank of Japan said it would double its stock purchases and help companies to obtain loans in response to the coronavirus pandemic.
The Japanese central bank has been purchasing exchange-traded stock funds at an annual pace of about $56 billion, and it said today it would double that target for now. It also introduced a new program to help banks lend to companies hit by the virus and expanded purchases of commercial paper.
The Canadian dollar the Australian dollar are lower in response to sharply lower crude oil prices.
Futures were sharply higher in a flight to quality move. However, prices are well off of the highs of the day as stock index futures stage a partial recovery.
Gold prices are sharply lower as investors are selling the precious metal in order to meet margin calls and boost cash holdings. Lower interest rates usually lift the price of gold, which is clearly not the case today, as the desire to raise cash dominates.
June 20 S&P 500
Support 2350.00 Resistance 2650.00
June 20 U.S. Dollar Index
Support 97.530 Resistance 98.720
June 20 Euro Currency
Support 1.11200 Resistance 1.12830
June 20 Japanese Yen
Support .93380 Resistance .95600
June 20 Canadian Dollar
Support .71520 Resistance .72900
June 20 Australian Dollar
Support .6072 Resistance .6282
June 20 Thirty Year Treasury Bonds
Support 178^12 Resistance 182^26
April 20 Gold
Support 1450.0 Resistance 1582.0
May 20 Crude Oil
Support 28.40 Resistance 33.85
May 20 Copper
Support 2.3300 Resistance 2.5200
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.