November 8, 2019
STOCK INDEX FUTURES
S&P 500, Dow and NASDAQ futures advanced to new record highs yesterday due to U.S.-China trade optimism. However, prices are lower today as optimism waned regarding the U.S. and China making progress in resolving the trade war.
The 9:00 central time November consumer sentiment index is expected to be 96 and the 9:00 September wholesale trade report is anticipated to show a 0.3% decline.
My view remains that the global reflation scenario is on track and easier credit conditions, although likely at a much slower pace, from most of the worlds central banks are coming and will be the dominant fundamental that supports stock index futures in the long term.
The U.S. dollar is higher, as it appears that the U.S. economy is holding up better than many analysts had anticipated.
The Canadian dollar is lower, as job creation in Canada unexpectedly fell in October after two consecutive strong showings.
The Canadian economy shed a net of 1,800 jobs in October on a seasonally adjusted basis when market expectations were for a 17,000 gain. This decline follows employment gains of 81,000 and 54,000 in August and September, respectively. The jobless rate was 5.5% in October, which matched market expectations.
In addition, the Canadian dollar was pressured by news that the total value of building permits in September in Canada fell 6.5%. Market expectations were for a 1.0% drop.
INTEREST RATE MARKET FUTURES
Futures are lower in reaction to indications that the U.S. and global economy is stabilizing.
Federal Reserve speakers today are San Francisco Federal Reserve Bank PresidentMary Daly at 10:45, New York Federal Reserve Bank PresidentJohn Williams at 7:00 PM and Federal Reserve Member of the Board of GovernorsLael Brainardat 8:25 PM.
Economists believe there is a 49% probability that the Federal Open Market Committee will lower its fed funds rate by another 25 basis points at the conclusion of its December 16, 2020 policy meeting.
It was only a few weeks ago that the financial futures markets were predicting an additional 25 basis point reduction in the fed funds rate in the first quarter of next year.
There are indications that the global economy is beginning to stabilize, which suggests major central banks are likely to push farther out into the future additional easing measures. As a result, interest rate market futures are likely to trade only sideways.
The flight to quality influence is likely to reemerge, however, from time to time.
If I am correct that the global economy is stabilizing, the industrial commodities, including copper, will likely advance in price.
SUPPORT AND RESISTANCE
December 19S&P 500
Support 3074.00 Resistance 3093.00
December 19 U.S. Dollar Index
Support 97.900 Resistance 98.260
December 19Euro Currency
Support 1.10420 Resistance 1.10860
December 19Japanese Yen
Support .91450 Resistance .91870
December 19Canadian Dollar
Support .75460 Resistance .75960
December 19Australian Dollar
Support .6856 Resistance .6918
December 19 Thirty Year Treasury Bonds
Support 156^0 Resistance 157^10
Support 1455.0 Resistance 1478.0
Support 2.6850 Resistance 2.7250
December 19 Crude Oil
Support 55.88 Resistance 57.35
Contact Alan for more extensive information on these markets at 312.242.7911 or via email at email@example.com. Thank you.
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