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Stock Index Futures Rebound


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November 16, 2017

STOCK INDEX FUTURES

Stock index futures are higher as leaders in the House cleared the way for a vote today on their tax overhaul bill.

Futures are higher in spite of weaker crude oil prices.

Jobless claims in the week ended November 11 increased 10,000 to a seasonally adjusted 249,000. Economists had expected 235,000 new claims last week.

The November Philadelphia Federal Reserve business index was 22.7, which compares to 27.9 in October.

Import prices increased .2% in October from a month ago when economists expected a .4% increase.

Industrial production increased in October to a seasonally adjusted .9% gain from the previous month. Economists had expected a .6% gain for September.

October capacity utilization was 77%, when 76.4% was anticipated.

The 9:00 November housing market index is estimated to be 67.

The main trend for stock index futures is higher.

CURRENCY FUTURES

The U.S. dollar is firmer due to hawkish comments from Boston Federal Reserve President Eric Rosengren, who said the Federal Reserve should continue to raise interest rates, including next month.

The British pound is higher on news that U.K. retail sales bounced back in October.

The U.K. Office for National Statistics said that retail sales increased .3% in October, exceeding analysts' expectations of .1% growth and recovering from the .7% decline in September.

Gains in the pound were limited by political discord in the U.K.

INTEREST RATE MARKET FUTURES

Flight to quality longs were liquidated in light of higher stock index futures.

Federal Reserve speakers today are Dallas Federal Reserve Bank President Robert Kaplan at 12:10 and Federal Reserve Governor Lael Brainard at 2:45.

According to financial futures markets, the probability that the Federal Open Market Committee will increase its fed funds rate at the December 12-13 meeting is over 98%.

I am totally on board with the consensus view that the FOMC will hike rates next month. However, I expect only two fed funds rate increases next year, while some analysts are predicting three more rate hikes in 2018.

SUPPORT AND RESISTANCE

December 17 S&P 500

Support 2558.00 Resistance 2581.00

December 17 U.S. Dollar Index

Support 93.660 Resistance 93.970

December 17 Euro Currency

Support 1.17650 Resistance 1.18260

December 17 Japanese Yen

Support .88210 Resistance .88880

December 17 Canadian Dollar

Support .78180 Resistance .78600

December 17 Australian Dollar

Support .7561 Resistance .7618

December 17 Thirty Year Treasury Bonds

Support 153^8 Resistance 154^8

December 17 Gold

Support 1272.0 Resistance 1285.0

December 17 Copper

Support 3.0400 Resistance 3.0800

December 17 Crude Oil

Support 54.90 Resistance 55.78

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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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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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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