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Stock Index Futures Holding Up Well in Spite of Mostly Bearish News


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May 18, 2018

STOCK INDEX FUTURES

Yesterday the small-cap Russell 2000 stock index futures advanced to a new record high.

Stock index futures are holding up relatively well today in spite of news that China denied that it had offered a package to slash the U.S. trade deficit by up to $200 billion and on theofficial formationof a populist, budget busting new Italian government.

In addition, there were some disappointing earnings reports overnight.

There are no major economic reports scheduled for today.

In the longer term, traders will likely gradually shift their focus of attention more toward the mostly stronger than expected corporate earnings reports and the still overall accommodative global interest rate policies and away from a variety of geopolitical worries.

CURRENCY FUTURES

The U.S. dollar advanced and the euro currency fell due to concerns about the formation of a new governing coalition in Italy. The Five Star Movement and the League reached a coalition agreement to govern the country and outlined proposals that will likely pressure public finances.

The Japanese yen is lower on news that Japans core inflation increased .7% from a year earlier in April, which was weaker than the .8% increase that was forecast by economists.

The Canadian dollar is lower on news that Canada's annual inflation rate slowed slightly in April. Canada's consumer price index gained 2.2% on a one year basis in April, following a 2.3% increase in March. The April result was just short of expectations for a 2.3% advance.

INTEREST RATE MARKET FUTURES

In the overnight trade thirty year Treasury bond futures fell to the lowest level since November 2014.

The probability of a fed funds rate increase from the Federal Open Market Committee at the June 13 meeting is almost 100%, which is unchanged from yesterday.

Analysts are anticipating two or three more interest rate hikes from the FOMC this year.

Interest rate market futures will probably trade lower, as two or three additional rate hikes from the Fed are predicted for 2019.

SUPPORT AND RESISTANCE

June 18 S&P 500

Support 2709.00 Resistance 2728.00

June 18 U.S. Dollar Index

Support 93.210 Resistance 93.710

June 18 Euro Currency

Support 1.17670 Resistance 1.18550

June 18 Japanese Yen

Support .90110 Resistance .90550

June 18 Canadian Dollar

Support .77420 Resistance .78310

June 18 Australian Dollar

Support .7481 Resistance .7533

June 18 Thirty Year Treasury Bonds

Support 140^2 Resistance 140^30

June 18 Gold

Support 1283.0Resistance 1295.0

July 18 Copper

Support 3.0600 Resistance 3.1000

June 18 Crude Oil

Support 71.07 Resistance 72.15

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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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About the author


Alan Bush has been a commodity analyst since 1976 focusing on the fundamental and technical aspects of stock index, interest rate and foreign currency markets. He has authored several articles for Stocks Futures and Options magazine and produced the “Futures Tech Focus” program, which is a technically based market outlook.

Alan served on the faculty of Oakton College as instructor of a course entitled, “Principles of Technical Analysis.” He has been interviewed on many national television programs, appearing on the Nightly Business Report, CNBC, CNN Moneyline, Reuters Television and Web FN. In addition, he has been frequently quoted in The Wall Street Journal, USA Today, The Bond Buyer and the Chicago Tribune and has been regularly interviewed on Chicago’s WMAQ radio business reports.

Alan can be reached at (312) 242-7911, or via email at alan.bush@admis.com.

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