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Daily Financial Forecast, Industrial Commodities Mostly Higher


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December 5, 2019

STOCK INDEX FUTURES

Stock index futures advanced due to optimism that the U.S. and China were moving closer to signing a phase-one trade deal.

Initial jobless claims declined 10,000 to 203,000 in the week ending November 30. Economists had expected 215,000 jobless claims.

The 9:00 central time October factory orders report is estimated to show a 0.3% increase.

My view remains that the global reflation scenario will continue and easier credit conditions, although likely at a slower pace, from most of the worlds central banks are coming and will be the dominant fundamental that underpins stock index futures.

CURRENCY FUTURES

The U.S. dollar is lower in spite of news that the U.S. trade deficit narrowed in October to the smallest in 16 months. The foreign-trade gap in goods and services was $47.20 billion when economists had expected a trade deficit of $48.50 billion.

The euro currency is higher in spite of news that German manufacturing orders fell in October on the month. Manufacturing orders declined 0.4% in October when economists had forecast a 0.2% increase.

The British pound advanced to a seven month high as opinion polls suggested Prime Minister Boris Johnson's Conservative Party would win a majority in next week's general election.

Japans Prime Minister Shinzo Abe's cabinet approved a $120 billion stimulus program, which is Japan's largest in over three years.

INTEREST RATE MARKET FUTURES

Flight to quality longs were liquidated in light of the more optimistic feeling on the state of the U.S.-China trade negotiations.

Randall Quarles of the Federal Reserve will speak at 9:00.

The Federal Open Market Committees next policy meeting will be held on December 10-11. No change in policy is likely.

Financial futures markets are suggesting there is a 53% probability that the FOMC will lower its fed funds rate by 25 basis points at its July 29, 2020 policy meeting. Yesterday the probability was 55%.

Interest rate market futures are likely to trade broadly sideways in the longer term, although the flight to quality influence will probably reemerge from time to time.

INDUSTRIAL COMMODITIES

If I am correct in my belief that the global economy is stabilizing, it is likely that the industrial commodities, including copper, crude oil and lumber will advance in price in the long term.

I will be out of the office December 6th through December 11th.

SUPPORT AND RESISTANCE

December 19S&P 500

Support 3105.00 Resistance 3128.00

December 19 U.S. Dollar Index

Support 97.350 Resistance 97.650

December 19Euro Currency

Support 1.10750 Resistance 1.11160

December 19Japanese Yen

Support .91730 Resistance .92050

December 19Canadian Dollar

Support .75600 Resistance .76060

December 19Australian Dollar

Support .6818 Resistance .6863

March 19 Thirty Year Treasury Bonds

Support 157^20 Resistance 159^10

February 19Gold

Support 1474.0 Resistance 1486.0

March 19Copper

Support 2.6500 Resistance 2.6850

January 20 Crude Oil

Support 58.00 Resistance 59.32

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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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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