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Economic Reports Stronger in U.S.

by Archer Financial Services | May 16, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures advanced yesterday when Treasury Secretary Steven Mnuchin said he expected to fly to Beijing to resume trade talks.

However, optimism on progress towards a trade resolution was limited after President Donald Trump signed an executive order that would enable the U.S. to ban American companies from purchasing telecom equipment from “foreign adversaries.”

All three U.S. economic reports came in stronger than expected.

Housing starts in April were 1.235 million when 1.200 million were anticipated and residential building permits were 1.296 million, the first monthly increase since December, which compares to the estimate of 1.290 million.

Initial jobless claims were 212,000 in the week ended May 11 when economists expected 220,000 new claims last week. 

The May Philadelphia Federal Reserve business outlook survey was 16.6 when 9.3 was expected.

My view remains that the global reflation scenario is on track and easier credit conditions from most of the world’s central banks are coming and will be the dominant fundamental that supports stock index futures in the long term. But, first we need to get past the U.S.-China trade hurdle.

CURRENCY FUTURES

The U.S. dollar advanced as a result of the three stronger than expected U.S. economic reports this morning.

The euro currency is lower even though the threat of U.S. tariffs on autos was pushed back. In addition, there are concerns about this weekend's European parliamentary elections.

The Canadian dollar firmed on news that Canada's factory sector recorded its strongest month in March in almost a year. Manufacturing sales climbed 2.1% in March from the previous month, which compares to expectations of a 1.7% rise. 

INTEREST RATE MARKET FUTURES

U.S. Treasury bond futures advanced to a seven week high in the overnight trade before the stronger than anticipated U.S. economic reports took prices lower.

Minneapolis Federal Reserve Bank President Neel Kashkari will speak at 11:05.

Financial futures markets are predicting there is a 73% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its December 11 policy meeting, which compares to 77% yesterday.

 

SUPPORT AND RESISTANCE

June 19 S&P 500

Support    2836.00      Resistance    2873.00

June 19 U.S. Dollar Index

Support    97.180        Resistance    97.610

June 19 Euro Currency

Support    1.12050      Resistance    1.12530

June 19 Japanese Yen

Support    .91230        Resistance    .91770

June 19 Canadian Dollar

Support    .74330        Resistance    .74760

June 19 Australian Dollar

Support    .6893          Resistance    .6945

June 19 Thirty Year Treasury Bonds

Support    149^14       Resistance     150^10

June 19 Gold

Support    1289.0        Resistance     1302.0

July 19 Copper

Support    2.7350        Resistance     2.7850

June 19 Crude Oil

Support    62.01          Resistance     63.13


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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