STOCK INDEX FUTURES
advanced due to hopes of more stimulus from central banks. China said overnight that it was planning to roll out additional stimulus in an effort to address an economic slowdown. Traders were also looking ahead to likely interest rate cuts from the Federal Reserve and the European Central Bank next month to fight slowing economic growth.
There was some support whenWhite House adviser Peter Navarro said the U.S. and China were currently talking about trade.
Also, the Federal Reserve Bank of Atlanta said its estimate for real GDP growth in the third quarter of 2019 is2.2%, as of August 15, which is up from 1.9% on August 8.
Housing starts in July fell 4% from the prior month to a seasonally adjusted annual rate of 1.191 million. The median estimate was 1.241 million. Building permits increased 8.4% to 1.336 million in July when 1.270 million were expected.
The 9:00 central time August consumer sentiment index is expected to be 97.5.
My view remains that the global reflation scenario is on track and easier credit conditions from most of the worlds central banks, including the Federal Reserve, are coming and will be the dominant fundamental that supports stock index futures in the long term.
However, in the short term there are better opportunities in trading the long side of the flight to quality vehicles.
The euro currency is lower, as markets anticipate a cut in the European Central Banks deposit rate of at least 10 basis points and the resumption of bond buying at the next ECB meeting next month.
The British pound is higher due to better-than-expected economic data in the U.K., including wage growth numbers.
Continue to trade the flight to quality currencies, the Japanese yen and the Swiss franc, from the long side.
INTEREST RATE MARKET FUTURES
Yesterday, the 30-year Treasury bond futures advanced to their highest level since November 2016. Today, prices are lower in response to a recovery in stock index futures and a slightly better tone to the U.S.-China trade talks.
Average rates for 30-year mortgages are at their lowest level in nearly three years, according to Freddie Mac.
Market participants believe 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 17-18.
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.
SUPPORT AND RESISTANCE
September 19S&P 500
Support 2847.00 Resistance 2882.00
September 19 U.S. Dollar Index
Support 97.900 Resistance 98.260
September 19Euro Currency
Support 1.10830 Resistance 1.11440
September 19Japanese Yen
Support .94030 Resistance .94600
September 19Canadian Dollar
Support .75000 Resistance .75400
September 19Australian Dollar
Support .6770 Resistance .6806
September 19 Thirty Year Treasury Bonds
Support 164^24 Resistance 166^10
Support 1509.0 Resistance 1533.0
Support 2.5800 Resistance 2.6150
September 19 Crude Oil
Support 54.18 Resistance 55.78
Please contact Alan for more extensive information on these markets at 312.242.7911 or via email at email@example.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 information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by Archer Daniels Midland Company. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. 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.