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US China Trade Concerns at The Forefront


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STOCK INDEX FUTURES

U.S. stock index futures are lower breaking a three-day winning streak, as China takes a tougher stance on trade.

Chinas Shanghai Composite Index fell 2.5%.


Beijing's higher tariffs on U.S. products on a $60 billion target list will go into effect on June 1, which could prompt Washington to go ahead with tariffs on an additional $300 billion worth of Chinese goods.

The 9:00 central time May consumer sentiment index is expected to be 97.5 and the 9:00 April leading indicators is anticipated to be up .3%.

As the U.S. earnings season winds down,of the 457 S&P 500 companies reporting approximately 75% of them beat profit expectations,according to Reuters data.

My view remains that the global reflation scenario is 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. But, first we need to get past the U.S.-China trade hurdle.

CURRENCY FUTURES

The euro currency is steady, although there are concerns about upcoming European parliamentary elections.

The British pound is down for the sixth day in a row and to a four month low after cross-party Brexit talks between the Conservatives and Labour collapsed.

The Japanese yen is higher, attracting safe-haven buying due to concerns over trade tensions and impending European elections.

The offshore Chinese yuan weakened to as low as 6.9497 against the dollar, which is its weakest level since November 30.

INTEREST RATE MARKET FUTURES

U.S. Treasury bond futures advanced and remain near a seven week high, as flight to quality buying continues to underpin the interest rate futures market.

Federal Reserve speakers today are Federal Reserve Board of Governors Vice ChairmanRichard Claridaat 9:00, New York Federal Reserve Bank PresidentJohn Williams at 10:15,Richard Claridaagain at 12:40 and John Williams again at 1:00.

Financial futures markets are predicting there is a 77% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its December 11 policy meeting, which compares to 73% yesterday.


SUPPORT AND RESISTANCE

June 19S&P 500

Support 2847.00 Resistance 2885.00

June 19 U.S. Dollar Index

Support 97.530 Resistance 97.830

June 19Euro Currency

Support 1.11780 Resistance 1.12190

June 19Japanese Yen

Support .91040 Resistance .91590

June 19Canadian Dollar

Support .74000 Resistance .74450

June 19Australian Dollar

Support .6871 Resistance .6913

June 19 Thirty Year Treasury Bonds

Support 149^10 Resistance 150^10

June 19Gold

Support 1280.0 Resistance 1291.0

July 19Copper

Support 2.7200 Resistance 2.7600

July 19 Crude Oil

Support 62.88 Resistance 63.98

Contact Alan for more extensive information on these markets 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 information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by Archer Daniels Midland Company. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. 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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