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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
S&P 500, Dow and NASDAQ futures advanced new record highs due to U.S.-China trade optimism, along with the resounding election victory for U.K. Prime Minister Boris Johnson's Conservative Party. The election results dramatically increased hopes for a quick divorce from the European Union. The U.K.'s FTSE 250 index touched a record high.
Prospects for increasing corporate profits and economic growth were enhanced by the developments.
U.S. retail sales increased less than expected in November. The Commerce Department said retail sales rose 0.2% last month when economists forecast retail sales would accelerate 0.5% in November.
Prices for foreign made goods imported to the U.S. increased in November. Import prices were up 0.2% in November from October, which matched expectations.
The 9:00 central time October business inventories report is anticipated to show a 0.2% 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 world’s central banks are coming and will be the dominant fundamental that underpins stock index futures.
The British pound advanced to its highest level since June 2018, after Boris Johnson secured the biggest Conservative Party election win since 1987. Prime Minister Boris Johnson said the election result meant the Conservative government “has been given a powerful new mandate to get Brexit done.” Mr. Johnson pledged to take the U.K. out of the European Union by January 31.
Sentiment among Japan's large manufacturers deteriorated to the weakest level in almost seven years during the three months to December, according to the Bank of Japan's quarterly tankan survey.
INTEREST RATE MARKET FUTURES
John Williams, president and chief executive officer of the Federal Reserve Bank of New York will speak at 10:00.
Financial futures markets are suggesting there is a 38% 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 51%.
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.
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.
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