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Stock Index Futures Performing Well on Mostly Bearish News

by Archer Financial Services | May 22, 2020

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures are higher despite rising tensions between Washington and Beijing.

On the June S&P 500 futures charts there is a double top on the weekly chart and a triple top on the daily chart.

There are no major economic reports scheduled for today.

Overall, stock index futures continue to perform well for the news in recent weeks.

CURRENCY FUTURES

The euro currency is higher after Germany's central bank published a positive report on the impact of the European Central Bank’s bond-buying program. This report came out two weeks after a German court demanded additional information about the program's economic justification. 
  
The British pound is lower after a report showed retail sales in the U.K. fell by a record 18.1% in April. The volume of retail sales declined 22.6% year-over-year from April 2019.  

Consumer confidence in the U.K. fell to the lowest level in a decade in May compared with the end of April. 

The Bank of Japan announced no change in its policies. However, officials did announce the creation of a new special program amounting to approximately 75 trillion yen to support corporate financing.    

INTEREST RATE MARKET FUTURES 

In light of increased U.S.-China tensions flight to quality buying is coming into the market.

The Federal Reserve’s balance sheet increased to $7.09 trillion for the week ending in May 20, which is up from $6.98 trillion in the previous week.

In keeping with the global trend of central banks becoming more accommodative, the Reserve Bank of India cut its key lending rate in an unscheduled move to support the economy.   The RBI's monetary policy committee reduced its repurchase agreement rate by 40 basis points to 4.00% from 4.40%. 

The next Federal Open Market Committee meeting is scheduled for June 9-10. Currently there is a 98.6% probability that the FOMC will leave its fed funds rate unchanged at zero to 25 basis points.

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    2901.00    Resistance    2958.00 

June 20 U.S. Dollar Index
Support    99.320       Resistance    99.940

June 20 Euro Currency
Support    1.08830     Resistance    1.09650 

June 20 Japanese Yen
Support    .92740        Resistance    .93280

June 20 Canadian Dollar
Support    .71150        Resistance    .71800 

June 20 Australian Dollar
Support    .6543           Resistance    .6605

June 20 Thirty Year Treasury Bonds
Support    179^4         Resistance     181^10

June 20 Gold
Support    1730.0         Resistance    1755.0 

July 20 Copper
Support    2.3700         Resistance    2.4400 

July 20 Crude Oil
Support   30.55             Resistance    34.13



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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