By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures are under pressure due to a variety of geopolitical issues, including trade war fears. President Donald Trump told reporters on Friday that while talks with China remain ongoing “we're not ready to make a deal.”
In addition, there are the Hong Kong protests, renewed political uncertainties in Italy and global economic growth worries.
My view remains that the global reflation scenario is on track and easier credit conditions from most of the world’s central banks, including the Federal Reserve, are coming and will be the dominant fundamental that supports stock index futures in the long term.
In light of ongoing geopolitical worries, the flight to quality currencies, the Japanese yen and the Swiss franc are higher.
There was pressure on the euro currency after Germany's Ifo Institute said its quarterly survey of business and economic experts suggests significantly weaker growth in world trade.
In the overnight session the British pound fell to its lowest level since March 2017 before a recovery.
Trade the flight to quality currencies, the Japanese yen and the Swiss franc, from the long side.
Futures are higher due to a variety of geopolitical worries, which are causing flight to safety capital flows.
Financial futures markets are predicting there is almost a 100% probability that the Federal Open Market Committee will lower its fed funds rate by another 25 basis points at its next meeting on September 18. Another rate cut after that is very likely before the end of the year.
In the longer term, higher prices are likely for futures, especially at the long end of the curve, as most major central banks, including the Federal Reserve, are likely to embark on a new round of easier credit policies.
Continue to trade the interest rate market futures from the long side, especially the 30 year Treasury bond futures.
September 19 S&P 500
Support 2889.00 Resistance 2935.00
September 19 U.S. Dollar Index
Support 97.040 Resistance 97.600
September 19 Euro Currency
Support 1.11850 Resistance 1.12620
September 19 Japanese Yen
Support .94800 Resistance .95580
September 19 Canadian Dollar
Support .75430 Resistance .75960
September 19 Australian Dollar
Support .6747 Resistance .6811
September 19 Thirty Year Treasury Bonds
Support 161^2 Resistance 162^28
October 19 Gold
Support 1490.0 Resistance 1516.0
September 19 Copper
Support 2.5650 Resistance 2.6150
September 19 Crude Oil
Support 53.40 Resistance 55.34
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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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This is not a solicitation of any order to buy or sell, but merely a collection of information related to Archer Financial services and commodities trading provided by Archer Financial services. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor do they purport to be complete. No responsibility is assumed with respect to any such element, nor with respect to any expression of opinion herein contained.
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.