rounded corner
rounded corner
top border

E:Mini S&P 500: The House approved the tax reforms....

Bookmark and Share

The House approved the tax reforms and the market is eating it up.Now the focus extends to the US Senate where we may be detained till well after Thanksgiving. The approval along with positive stock earnings propelled the market to it's highs. The highs may be short-lived if the tax reforms stall in the Senate.

Inflation is on the rise and retail sales is making a comeback. Yet still there is the question of global growth and the tax reforms coming to fruition. It will be interesting to see if this stock market can hold up if the data is weak and the forecasts or sentiment is for the interest rate hike in December. The country awaits the long overdue tax reforms and cuts promised during the campaign of US President Donald Trump with nervous apprehension. The consumer is still confused by the tax reforms and who exactly will benefit. The US House of Representative has been forming the structure and implementation of a US tax code as promised by US President Donald Trump. The tax bill written would increase the US deficit by $300 billion. While the vote seemed to welcome the boost to the US economy, Fitch, a credit rating agency, believes that the tax plan may stimulate growth, it may also lead to hefty fiscal deficits. The federal deficit for 2017 alone equals around $666 billion. US deficit total may exceed $20 trillion. The house bill is introduced with the idea that new government revenues may absorb some of the deficit. The tax cuts may appeal to certain groups but not necessarily the low income or middle class. The Republicans usually guard against increases in the federal deficit, so this becomes more complicated.

Today's Initial Jobless Claims forthe week of November 11th were up 10,000 to 249,000 while the previous reading was 239,000. Continuing Claims were down 44,000 to 1.860 million with a one-week lag time. The Philadelphia Fed Business Outlook Survey for November was 22.7 while the previous reading was 27.9. Import Prices for October were 0.2 % while the previous reading was 0.7 %.The Export Prices were 0.0 % while the previous reading was 0.8 %. Industrial Production was 0.9 % whilethe previous reading was 0.3 %. The Manufacturing was 1.3 % while the previous reading was 0.1 %. The Capacity Utilization was 77.0 % while the previous reading was 76.0 %. The Bloomberg Consumer Comfort Index for the week of November 12th was 52.1 while the previous reading was 51.5. The Housing Market Index for November was 70 while the previous reading was 68.

US President Donald Trump has selected Federal Reserve Governor Jerome Powell as Chairman of the Federal Reserve. Powell is noted as a dovish monetary policy that is thought to bring continuity to the Federal Reserve. He has been supportive of Chair Janet Yellen's gradual progression of monetary policy. The sustainable future with the US economy seems to be just a matter of continuing on the path we have been on. The Federal Open Market Committee found that the labor market has continued to strengthen and that the economic activity has been rising at a solid rate despite the hurricane disruptions. Household spending has been on an upswing despite the weather related problems. The Fed remains fairly accommodative thus supporting the labor market. The tax reforms and cuts would be the frosting on the cake of course. The tax reforms may be progressing but it becomes questionable who may benefit the most from the measures. The US Corporations may not have the same plans for the added benefits. The House did pass a budget bill to open the door to the tax reforms and cuts. The market may rocket back up upon the sentiment shifting toward the final tax reforms and cuts going to fruition. Inflation still remains a muted 1.7 % a far cry from the Feds 2 % target rate. The hurricanes have caused destruction and in the near term will affect the economic activity. Higher energy costs due to the storms may boost inflation in the short term. Their stance was accommodative, but they intend to begin to wind down the quantitative easing in October by reducing its $4.2 trillion of holdings in US Treasury Bonds and mortgage backed securities. Expecting a tightening in the labor sector may over time boost wages as well thus contributing further to consumer spending. Inflation seems to still be baffling to the Fed, but may be addressed by an alteration of monetary policy. US Fed Chair Yellen's term ends on February 3rd 2018.

The Nonfarm Payrolls for October were 261,000 new jobs created under expectations while the previous reading was a meager -33,000 new jobs created. The Unemployment Rate was 4.1 % while the previous reading was 4.2 %. The Private Payrolls were 252,000 while the previous reading was -40,000. Manufacturing Payrolls was 24,000 while the previous reading was -1,000. The Participation Rate was 62.7 % while the previous reading was 63.1 %. The Average Hourly Earnings were 0.0 % while the previous reading was 0.5 %. The Average Workweek was 34.4 hours unchanged. The expansion of the US economy is both expected and welcome along with US President Trumps tax cuts and reforms. Of course, there is still the implementation of these cuts. There is a sentiment that the tax cuts may be of little worth to some. The GDP Price Index came in at 1.0 % while the previous reading was 1.0 %. The Real Consumer Spending was 3.3 % while the previous reading was 3.3 %. The strength of the market may be propelled by sentiment and the sentiment sets the stage for a higher trade. Once achieved, then a retracement may ensue. Any further sparring with North Korea can impact the market negatively along with any further doubt about the reforms and tax cuts projected by US President Donald Trump. The tax cuts and reforms seem to be stifled by the US budget deficit. The government runs on our tax dollars and the lack of those extra taxes cuts into what we pay down the deficit with. The US government needs to find additional revenue and that may be tricky. Economic growth may increase revenue, but that must come from expansion which has not come to fruition as of yet. The E-Mini S&P 500 seems unstoppable, yet this is the time to worry. This is the season where it may typically retrace. The fall is a time historically where the market has made some significant sell-offs, so this is the time to trade with caution. We remember black Monday in October of 1987.

We live stream the radio show @!

Today's E-Mini S&P 500 (December) traded $2589.50 to $2562.25 an inside to higher day. The E-Mini S&P 500 is in a bearish stance unless it can penetrate $2592.50. Friday's range for the ESZ7 could be $2597.50 to $2569.50, an inside to higher or inside day. The VIX was down -10.43 % to $11.76. The VIX may trade inversely to the E-Mini S&P 500.

The EIA Crude Oil Stocks were a build of +1.85 million barrels. The EIA Motor Gas Stocks were a build of +0.89 million barrels. The API Crude Oil Stocks were a build of +6.5 million barrels. The API Motor Gas Stocks were a build of +2.4 million barrels. OPEC's Secretary General does not see any problems extending the cuts thru March of 2018. OPEC Members are running about 92 % compliance with the cuts. OPEC seems to be keeping its vow to allow the production cuts to continue into next year. Energy analyst at Goldman Sachs projects that the estimated US Crude Oil demand may decline by about 900,000 bpd due to the impact of the hurricanes. Saudi Energy Minister agrees with UAE that it may be considered to extend the oil supply reduction past the March 2018 time frame.

CFRN Emini Radio
YouTube Live Stream 12 noon Eastern M-F

Live Charts / Lively Discussion / Participate in the discussion...

Trading's Not Easy - But It Can Be Simple!


Call us toll free @ 866-928-3310 during normal business hours.

After Dark - email or call 949-42-EMINI

Special Offering for Christian Traders!

Please note that CFRN articles may be co-written or uploaded by the editorial staff or contributing members.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Recent articles from this author

About the author

Deactivated Jul 9 2018

DeWayne Reeves is the founder of CFRN and host of a popular radio program heard daily in over 20 countries. A former equities trader, he has focused primarily on the S&P 500 Emini Futures Market for the past 5 years. His insights and trading methodology are a blend of traditional technical analysis and the strategic use of proprietary indicators. He is the founding director of New Hope Orphanage and Primary School in Kampala Uganda East Africa which is home to over 800 orphans. Mr Reeves currently resides with his wife in Phoenix Az. where he actively trades his personal account.

Tune in M-F from 11am-1pm Eastern for market analysis, technical tips and lively discussion. CFRN /

Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. is not a broker, nor does it have an affiliation with any broker.

Copyright ©2005-2019, a product. All rights reserved.

About Us  •   Sitemap  •   Terms of Use  •   Privacy Policy