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Alan has been a commodity analyst since 1976, focusing on the fundamental and technical aspects of precious metals, stock index, interest rate and foreign currency markets. He has authored several articles for Futures magazine and Stocks Futures and Options magazine. 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 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 is currently the Senior Financial Economist with ADM Investor Services, Inc.
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STOCK INDEX FUTURES
U.S. stock index futures are mixed today after the S&P 500 and NASDAQ cash indexes closed at record highs yesterday.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for trade negotiations beginning on April 30. In addition, Chinese Vice Premier Liu He, who will lead the Beijing talks for China, will travel to Washington for more discussions beginning on May 8.
The White House said next week’s discussions will cover trade issues, including intellectual property, forced technology transfers, non-tariff barriers, agriculture, services, purchases and enforcement.
This week is the busiest week of the first quarter earnings season with 155 companies reporting.
More than a fifth of the S&P 500 companies have reported results, with almost 80% of them producing results that exceeded analysts’ consensus estimates. This compares to approximately 65% in the fourth quarter, according to data from Refinitiv.
My view is that the global reflation story remains on track and easier credit conditions from most of the world’s 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 higher, as U.S. economic data continues to hold up relatively well compared to other major economies.
The euro currency fell towards a one month low on news that German business sentiment unexpectedly worsened in April. The Ifo Institute’s business climate index slipped to 99.2 from a revised 99.7 in March. Economists had forecast a small increase in the index to 99.9 in April.
The Australian dollar is lower on news that the country’s consumer price index rose 0.1% in the first quarter when economists had forecast a 0.2% increase.
On a year-to-year basis, the CPI rose 1.3% after an increase of 1.8% in the previous quarter. Economists had expected a 1.5% rise in inflation. These weaker than expected inflation numbers heightened the prospect of an interest rate cut by the Reserve Bank of Australia. INTEREST RATE MARKET FUTURES
Futures are higher as it appears more likely that the Federal Reserve will lower its fed funds rate this year. Much of the pressure on the Fed to ease credit conditions is coming from weaker overseas data rather than from U.S. economic data.
The Treasury will auction $41 billion of five year notes today.
The next Federal Open Market Committee meeting is scheduled for May 1. No change in the fed funds rate is expected at that meeting.
Financial futures are predicting there is a 58% 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%.
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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