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Earnings Season Begins Tomorrow


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April 12, 2018

STOCK INDEX FUTURES

Stock index futures are higher, looking past geopolitical risks and concerns about possible faster interest rate increases.

Some support is coming from ideas that Syria tensions may be ebbing, especially after President Donald Trump made comments that cast doubt over the timing of his threatened military strike on Syria.

President Trump tweeted, Never said when an attack on Syria would take place. Could be very soon or not so soon at all!

In addition, there is support from expectations of strong corporate earnings. Earnings season starts tomorrow.

Some analysts are predicting quarterly earnings for S&P 500 companies will increase 17% to 18.5% from a year ago.

Initial jobless claims decreased by 9,000 to a seasonally adjusted 233,000 in the week ended April 7. Claims have now held below 300,000 for 162 consecutive weeks, which is the longest streak for weekly records going back to 1967.

Economists expected 230,000 new claims last week.

Longer term, traders will probably gradually shift their focus of attention more toward earnings and the still accommodative global interest rate environment.

CURRENCY FUTURES

After four days of declines, the U.S. dollar is higher as prospects for a fed funds rate hike in June increased.

The euro currency is lower after a report showed industrial production in the euro zone fell for a third straight month in February.

The European Union's statistics agency said output in February was .8% lower than in January. Economists anticipated a .2% increase.

Flight to quality longs are being liquidated in the Japanese yen in light of the reduced tensions in Syria.

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

INTEREST RATE MARKET FUTURES

There was some pressure on futures after yesterdays release of the minutes from the March Federal Open Market Committee meeting indicated Federal Reserve officials were a little more hawkish than expected.

In addition, some of the selling can be attributed to a better tone to the situation in Syria, prospects of tighter credit from the Fed and todays Treasury offering of 30 year bonds.

The probability of a fed funds rate hike from the Federal Open Market Committee at the June 13 meeting is 90%, which compares to 85% yesterday.

SUPPORT AND RESISTANCE

June 18 S&P 500

Support 2636.00 Resistance 2665.00

June 18 U.S. Dollar Index

Support 89.110 Resistance 89.640

June 18 Euro Currency

Support 1.23600 Resistance 1.24450

June 18 Japanese Yen

Support .93530 Resistance .94150

June 18 Canadian Dollar

Support .79350 Resistance .79830

June 18 Australian Dollar

Support .7733 Resistance .7783

June 18 Thirty Year Treasury Bonds

Support 145^20 Resistance 146^16

June 18 Gold

Support 1340.0Resistance 1362.0

May 18 Copper

Support 3.0300 Resistance 3.1250

May 18 Crude Oil

Support 66.23 Resistance 66.73

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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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