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S&P 500 and Dow Futures at New Historical Highs


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November 29, 2017

STOCK INDEX FUTURES

Stock index futures firmed yesterday when the path to U.S. tax reform became a little clearer after the Senate Budget Committee narrowly approved the Republican tax plan.

S&P 500 and Dow futures advanced to new historical highs today on news that U.S. economic growth in the third quarter was stronger than earlier thought and corporate profits rebounded during the summer months.

Gross domestic product expanded at a 3.3% seasonally and inflation adjusted annual rate in the third quarter. This was the strongest quarterly growth reading in three years and matched economists' expectations.

The report also showed increasing profits at U.S. businesses.

Earlier today Federal Reserve Chair Janet Yellen said the U.S. central bank will continue with its path of gradual increases in short term interest rates.

She offered a mostly upbeat assessment of the performance of the U.S economy during the second half of 2017.

The 9:00 central time October pending home sales report is expected to show a 1% increase.

The computer models that I use continue to generate bullish signals for stock index futures.

The main trend for stock index futures is higher.

CURRENCY FUTURES

The U.S. dollar fell in the overnight trade due to worries over a possible U.S. government shutdown. However, prices firmed later due to the gross domestic product report.

The euro currency is a little lower in spite of news that German inflation accelerated more than anticipated in November.

Germany's annual inflation rate advanced to 1.8% from 1.5% in October. Economists had forecast an increase of 1.7%.

The British pound responded positively to news that the U.K. and the E.U. may be close to a deal on the Brexit bill.

In addition, the pound was supported by news that consumer credit increased by 1.5 billion pounds, which was in line with the average pace of the past six months.

The Canadian dollar and the Australia dollar are lower due to weaker crude oil prices.

INTEREST RATE MARKET FUTURES

Futures are lower especially at the long end of the curve due to todays release of the third quarter gross domestic product report and improving corporate earnings.

San Francisco Federal Reserve Bank President John Williams will speak at 12:50.

At 1:00 the Federal Reserve will release its Beige Book on the economy.

Federal Reserve Governor Jerome Powell testified before the Senate Banking Committee yesterday, but made little mention of monetary policy.

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 better than 99%.

SUPPORT AND RESISTANCE

December 17 S&P 500

Support 2620.00 Resistance 2635.00

December 17 U.S. Dollar Index

Support 92.810 Resistance 93.450

December 17 Euro Currency

Support 1.18210 Resistance 1.18980

December 17 Japanese Yen

Support .89250 Resistance .89950

December 17 Canadian Dollar

Support .77650 Resistance .78210

December 17 Australian Dollar

Support .7545 Resistance .7619

March 18 Thirty Year Treasury Bonds

Support 151^20 Resistance 153^24

February 18 Gold

Support 1286.0 Resistance 1301.0

March 18 Copper

Support 3.0600 Resistance 3.1250

January 18 Crude Oil

Support 57.31 Resistance 58.31

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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