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Stock Index Futures Likely to at Least Partially Recover

by Archer Financial Services | May 15, 2020

By Alan Bush | Senior Financial Economist at ADMIS   

 

STOCK INDEX FUTURES

Stock index futures traded lower due to increased U.S.-China trade tensions. 

April retail sales fell 16.4%, which compares to the expected decline of 11.2%.

The May Empire State manufacturing survey was negative 48.5 when negative 65.0 was anticipated.

April industrial production declined 11.2% when down 11.5% was predicted and capacity utilization was 64.9% when 64.1% was estimated.

There are three 9:00 central time reports. The May consumer sentiment index is expected to be 66. The March business inventories report is anticipated to show a decline of 0.5% and the March Job Openings and Labor Turnover Survey (JOLTS) is predicted to be 5.9 million. 

Some recovery is likely for stock index futures from the current lower levels.

CURRENCY FUTURES

The euro currency is higher after a report showed Germany’s gross domestic product in the first quarter contracted 2.2% compared with the previous quarter but was better than economist’s predictions of a 2.5% decline.     

The euro zone's trade with the rest of the world fell in March, with imports falling at the fastest rate since records began in 2009.   The European Union's statistics agency said that, adjusted for seasonal variations, the currency area's purchases of goods from beyond its borders fell 9.0% from February, while its exports declined 8.9%. 

The British pound fell when a lead U.K. negotiator said little progress is being made in Brexit talks.

INTEREST RATE MARKET FUTURES 

Some flight to quality buying is coming into the long end of the curve in light of lower stock index futures.

The yield on 10-year Treasuries fell to 0.601%, which is the lowest point this month, from 0.617% on Thursday as investors sought safe-haven assets.

The Federal Reserve’s balance sheet grew to a record $6.98 trillion in the week ended May 13, which is up from $6.72 trillion in the previous week, the central bank said yesterday. Much of the balance sheet’s expansion was due to an increase in the Fed’s holdings of mortgage-backed bonds by $178 billion.

SUPPORT & RESISTANCE


June 20 S&P 500
Support    2805.00    Resistance    2866.00 

June 20 U.S. Dollar Index
Support    100.050     Resistance    100.600

June 20 Euro Currency
Support    1.07880     Resistance    1.08640 

June 20 Japanese Yen
Support    .93020        Resistance    .93780

June 20 Canadian Dollar
Support    .70800        Resistance    .71400 

June 20 Australian Dollar
Support    .6412           Resistance    .6480

June 20 Thirty Year Treasury Bonds
Support    181^10       Resistance     182^16

June 20 Gold
Support    1734.0         Resistance    1762.0 

July 20 Copper
Support    2.3300         Resistance    2.3800 

July 20 Crude Oil
Support    27.45            Resistance    29.13

 



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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