October 12, 2017
STOCK INDEX FUTURES
Dow Jones futures advanced to a new marginal record high in the overnight trade, although futures are a little lower now. Recent strength is linked to the relatively low global interest rate environment and optimism about global economic growth.
The producer price index rose .4% in September, as expected, following an increase of .2% in August.
The annual producer price index was up 2.6% last month, which was the fastest rate in over five years and beat economists expectations of 2.5%.
Initial weekly jobless claims fell in the week ended October 7 fell by 15,000 to 243,000 to mark the lowest level in six weeks. Economists had forecast claims to total 250,000.
Third quarter earnings season started today. Analystsare anticipating another quarter of growth with the earnings growth estimate at 5.5%, while revenue growth is expected to be 4.3%.
The computer models that I use continue to generate bullish signals for stock index futures.
The main trend for stock index futures is higher.
After three days of lower prices, the U.S. dollar is higher in spite of a slightly lessened probability of a fed funds rate hike in December.
The euro currency is a little lower despite news that factory output in the euro zone surged.
Industrial output in the euro zone increased 1.4% in August from July, and was up 3.8% from a year ago, which was much stronger than expected. Economists estimated a month to month increase of only .5%.
INTEREST RATE MARKET FUTURES
Futures are steady to higher due to limited flight to quality buying and a slightly smaller chance of a fed funds rate increase in December.
Federal Reserve speakers today are Federal Reserve Governor Lael Brainard and Federal Reserve Governor Jerome Powell at 9:30. Atlanta Federal Reserve Bank President Raphael Bostic will speak at 8:15 this evening.
The Treasury will auction 30 year bonds today.
The Federal Reserve appears to be on track to raise its fed funds rate for a third time this year, and the fifth since late 2015, to a range of between 1.25% and 1.50%.
According to financial futures markets, the probability that the Federal Open Market Committee will increase its fed funds rate at the December 13 meeting is 88%, which compares to 93% yesterday.
The long term fundamentals for futures are mixed.
SUPPORT AND RESISTANCE
December 17 S&P 500
Support 2543.00 Resistance 2555.00
December 17 U.S. Dollar Index
Support 92.520 Resistance 93.110
December 17 Euro Currency
Support 1.18770 Resistance 1.19320
December 17 Japanese Yen
Support .89030 Resistance .89460
December 17 Canadian Dollar
Support .80010 Resistance .80580
December 17 Australian Dollar
Support .7769 Resistance .7839
December 17 Thirty Year Treasury Bonds
Support 152^0 Resistance 153^8
December 17 Gold
Support 1291.0Resistance 1303.0
December 17 Copper
Support 3.0800 Resistance 3.1300
November 17 Crude Oil
Support 50.11 Resistance 51.55
For more information about these markets, please contact Alan at 312.242.7911 or via email at firstname.lastname@example.org. 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.