May 16, 2019
STOCK INDEX FUTURES
U.S. stock index futures advanced yesterday when Treasury Secretary Steven Mnuchin said he expected to fly to Beijing to resume trade talks.
However, optimism on progress towards a trade resolution was limited after President Donald Trump signed an executive order that would enable the U.S. to ban American companies from purchasing telecom equipment from foreign adversaries.
All three U.S. economic reports came in stronger than expected.
Housing starts in April were 1.235 million when 1.200 million were anticipated and residential building permits were 1.296 million, the first monthly increase since December, which compares to the estimate of 1.290 million.
Initial jobless claims were 212,000 in the week ended May 11 when economists expected 220,000 new claims last week.
The May Philadelphia Federal Reserve business outlook survey was 16.6 when 9.3 was expected.
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.
The U.S. dollar advanced as a result of the three stronger than expected U.S. economic reports this morning.
The euro currency is lower even though the threat of U.S. tariffs on autos was pushed back. In addition, there are concerns about this weekend's European parliamentary elections.
The Canadian dollar firmed on news that Canada's factory sector recorded its strongest month in March in almost a year. Manufacturing sales climbed 2.1% in March from the previous month, which compares to expectations of a 1.7% rise.
INTEREST RATE MARKET FUTURES
U.S. Treasury bond futures advanced to a seven week high in the overnight trade before the stronger than anticipated U.S. economic reports took prices lower.
Minneapolis Federal Reserve Bank PresidentNeel Kashkari will speak at 11:05.
Financial futures markets are predicting there is a 73% 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 77% yesterday.
SUPPORT AND RESISTANCE
June 19S&P 500
Support 2836.00 Resistance 2873.00
June 19 U.S. Dollar Index
Support 97.180 Resistance 97.610
June 19Euro Currency
Support 1.12050 Resistance 1.12530
June 19Japanese Yen
Support .91230 Resistance .91770
June 19Canadian Dollar
Support .74330 Resistance .74760
June 19Australian Dollar
Support .6893 Resistance .6945
June 19 Thirty Year Treasury Bonds
Support 149^14 Resistance 150^10
Support 1289.0 Resistance 1302.0
Support 2.7350 Resistance 2.7850
June 19 Crude Oil
Support 62.01 Resistance 63.13
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