By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures are lower pointing to another volatile session for Wall Street on fears that the dramatic stimulus measures globally will not be able to avert a severe coronavirus-driven economic slowdown.
S&P 500 futures were down the daily trading limit in the overnight trade.
The Trump administration is pressing for a $1 trillion stimulus package and the Federal Reserve relaunched a plan to buy short-term corporate debt.
President Donald Trump promised money to people out of work, and will hold a news conference today to discuss “very important news from the FDA.”
February housing starts were 1.599 million when 1.520 million were expected and permits were 1.464 million, which compares to the anticipated 1.500 million.
The U.S. dollar index is sharply higher and is at its highest level since May 2017, as international demand for U.S. dollars surges.
In addition, there is the belief that the U.S. economy will hold up better than elsewhere in the world.
It seems that the U.S. dollar is the only flight to quality vehicle that has consistently performed as it should in recent days.
German Chancellor Angela Merkel indicated she may be open to joint European Union debt issuance. This caused bonds to decline on concerns about a deluge of new debt as nations unveiled programs to spend their way out of this crisis.
European banks took $130 billion made available by the U.S. Federal Reserve today, helping ease the funding strains from the coronavirus pandemic.
The British pound fell below its 2016 lows, as investors feared the impact of the coronavirus on the global economy.
Also, U.K. Prime Minister Boris Johnson said post-Brexit talks with the E.U. have been paused as the U.K. and the E.U. focus on battling the impact of the global pandemic.
The U.K. is mulling a £350 billion stimulus package.
Traders are becoming more selective in which flight to quality vehicle to seek safety. Currently the front end of the curve is more attractive than the long end of the curve.
Some of this can be attributed to news that large amounts of longer dated euro bonds could be issued.
June 20 S&P 500
Support 2341.00 Resistance 2488.00
June 20 U.S. Dollar Index
Support 99.330 Resistance 100. 880
June 20 Euro Currency
Support 1.09340 Resistance 1.10980
June 20 Japanese Yen
Support .92880 Resistance .94150
June 20 Canadian Dollar
Support .69030 Resistance .70740
June 20 Australian Dollar
Support .5860 Resistance .6035
June 20 Thirty Year Treasury Bonds
Support 167^12 Resistance 173^16
June 20 Gold
Support 1486.0 Resistance 1555.0
May 20 Crude Oil
Support 24.05 Resistance 27.70
May 20 Copper
Support 2.1550 Resistance 2.3450
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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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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.