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Fed Chair Powell's Comments Support Stock Index Futures

by Archer Financial Services | May 18, 2020

By Alan Bush | Senior Financial Economist at ADMIS   

 

STOCK INDEX FUTURES

Stock index futures are sharply higher after Federal Reserve Chair Jerome Powell expressed optimism Sunday that the U.S. economy can begin to recover in the second half of the year, although he acknowledged that it could take more than a year to recover.

Fed Chair Powell said, “We’re not out of ammunition by a long shot” as the Fed could enlarge existing lending programs or begin new ones. 

Mr. Powell is due to appear before the Senate Banking Committee tomorrow at 9:00 central time.

The 9:00 May housing market index is expected to be 33.

The technical picture continues to improve for stock index futures.

CURRENCY FUTURES

The U.S. dollar is lower on the belief that the Federal Reserve could do more to stimulate the U.S. economy, especially after Fed Chair Powell’s recent comments. 

The British pound is steady despite growing speculation that the U.K. may be next to push interest rates below 0%.

The Japanese yen is lower after a report showed Japan's economy, the world's third largest, fell into a recession in the first quarter. The economy shrank an annualized 3.4% in the three months ended March 31 after a 7.3% contraction in the previous quarter. Economists expected a 4.8% annualized contraction. Two consecutive quarters of contraction is one definition of a recession. 

INTEREST RATE MARKET FUTURES 

Safe-haven longs are being liquidated in light of sharply higher stock index futures, especially at the long end of the curve.

Last week the Federal Reserve said its ’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 thirty-year Treasury bond futures are in a broadly based congestion pattern, as the main fundamental influences are offsetting. 

SUPPORT & RESISTANCE


June 20 S&P 500
Support    2847.00    Resistance    2945.00 

June 20 U.S. Dollar Index
Support    100.050     Resistance    100.550

June 20 Euro Currency
Support    1.08000     Resistance    1.08600 

June 20 Japanese Yen
Support    .93020        Resistance    .93500

June 20 Canadian Dollar
Support    .70800        Resistance    .71400 

June 20 Australian Dollar
Support    .6408           Resistance    .6487

June 20 Thirty Year Treasury Bonds
Support    179^12       Resistance     181^8

June 20 Gold
Support    1738.0         Resistance    1778.0 

July 20 Copper
Support    2.3300         Resistance    2.4100 

July 20 Crude Oil
Support    29.45            Resistance    32.55

 



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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