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U.S. Stock Index Futures Lower, but Likely to Recover


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April 22, 2019

STOCK INDEX FUTURES

U.S. stock index futures came under pressure after Chinas politburo meeting signaled Chinas economy is stable enough that extended support isnt needed, implying a less dovish policy stance.

In spite of what was reported, many analysts believe Chinas economy will need additional stimulus.

The Chicago Federal Reserve national activity index improved in March to -0.15, which is better than the revised -0.31 in February.

The 9:00 central time March existing home sales report is expected to show 5.3 million.

Of the 77 companies in the S&P 500 reporting so far, almost 78% beat earnings expectations, according to Refinitiv, while approximately 48.1% have surpassed revenue estimates. First quarter earnings reports suggests a 1.7% decline from the same period last year.

This week is the busiest week of the first quarter earnings season with 155 companies reporting.

I expect stock index futures to recover from the early selling pressure.

My view is that the global reflation story remains on track and easier credit conditions from most of the worlds central banks are coming and will be the dominant fundamental that supports stock index futures in the long term.

CURRENCY FUTURES

U.S. dollar is lower, ignoring the improvement in the Chicago Federal Reserve national activity index, and the slightly falling probability of a fed funds rate decline from the Federal Reserve this year.

The Canadian dollar is higher due to the sharp advance in crude oil prices.

INTEREST RATE MARKET FUTURES

Futures are a little higher at the front of the curve and a bit lower at the long end.

The next Federal Open Market Committee meeting is scheduled for May 1.

Financial futures are predicting there is a 43% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its December 11. Late last week the probability was 47%.

SUPPORT AND RESISTANCE

June 19S&P 500

Support 2894.00 Resistance 2918.00

June 19 U.S. Dollar Index

Support 96.900 Resistance 97.150

June 19Euro Currency

Support 1.12850 Resistance 1.13170

June 19Japanese Yen

Support .89600 Resistance .89840

June 19Canadian Dollar

Support .74740 Resistance .75060

June 19Australian Dollar

Support .7130 Resistance .7167

June 19 Thirty Year Treasury Bonds

Support 146^0 Resistance 146^30

June 19Gold

Support 1273.0 Resistance 1284.0

May 19Copper

Support 2.8900 Resistance 2.9450

June 19 Crude Oil

Support 63.95 Resistance 66.21

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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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