STOCK INDEX FUTURES
There was some selling pressure in the overnight trade after Moody's Investor Service said it may reduce the Aaa ratings of the U.K. and France, while downgrading six euro area countries.
The National Federation of Independent Business optimism index was 93.9, which compares to the estimate of 95.
January advance retail sales increased .4%, which compares to the estimate of a .8% increase and retail sales, excluding autos, advanced .7%, when a .5% increase was anticipated. The previous figures for retail sales and retail sales, less autos, were both revised lower.
The 9:00 central time, December business inventories report is expected to show a .5% increase.
Euro zone finance ministers will meet in Brussels tomorrow to decide whether to approve a 130 billion euro second aid package for Greece.
According to a Bloomberg report, approximately 70% of the 333 corporations in the S&P 500 that have reported earnings since January 9 have beat analysts' estimates.
Paradoxically, there are growing concerns that growth in the global economy is slowing at a time when stock index futures sentiment is becoming more bullish.
CURRENCY FUTURES
The euro came under pressure in the overnight trade on news that Moody's Investor Service cut the credit ratings of six European countries. The euro temporarily firmed later after a report showed German investor confidence increased in February. The ZEW Center for European Economic Research said its index of investor and analyst expectations advanced to 5.4 from -21.6 in the previous month.
The gross domestic product of Greece declined 7% from a year ago in the fourth quarter, after a 5% contraction in the third quarter.
German Finance Minister Wolfgang Schaeuble said Europe is more prepared now for a Greek default than they were two years ago.
The British pound registered a two-week low after a report showed U.K. inflation in December slowed to its weakest rate in 14 months.
The Japanese yen declined on news that the Bank of Japan unexpectedly added 10 trillion yen to their asset-purchasing plan in an effort to stimulate their economy. The yen came under pressure base on ideas that additional liquidity in the Japan's banking system would undermine the yen from an interest rate differential point of view.
Our analysis indicates the euro zone economy will enter into recession and the value of the euro will decline against the U.S. dollar in the long term.
INTEREST RATE MARKET FUTURES
Futures gained when the bullish U.S. retail sales report was released.
At 4:40 this afternoon, Federal Reserve Bank of Atlanta President Dennis Lockhart will talk about the outlook for the economy.
Treasury futures are being supported by a variety of flight to quality influences.
These include the continuing tensions in the Middle East, increasing prospects of a recession in the euro zone, a trend toward weaker economic data from China, along with fears that the Chinese economy is headed for a hard landing.
Expect Treasury futures to trade higher from current levels.
For more market information, I can be reached at 312.242.7911 or via e-mail at alan.bush@archerfinancials.com.
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