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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 lower due to disappointing earnings from several technology companies. In addition, there was pressure after the Trump administration warned that it is prepared to impose more sanctions on Turkey if it doesn't release the American pastor facing 35 years in prison on disputed espionage charges.
The selling was limited by guarded optimism that progress could be made in next week's new round of trade talks between the U.S. and China.
The 9:00 August consumer sentiment index is expected to be 97.9 and the 9:00 July leading indicators report is anticipated to be up .4%.
Relatively speaking, U.S. equity markets are holding up well compared to China’s Shanghai composite index, which fell to a two year low today. China's economic data has been disappointing recently, suggesting China’s gross domestic product could slow further in the second half of this year.
The still relatively low global interest rate environment and the mostly stronger than estimated U.S. corporate earnings reports remain long term supportive to U.S. stock index futures. CURRENCY FUTURES The euro currency was lower in the overnight trade, but is higher now against the U.S. dollar.
The Canadian dollar is higher after a report showed Canadian consumer prices soared the most since 2011. Canadian consumer prices were up 3.0% on an annualized basis in July, which is well above expectations of a 2.5% increase.
In addition, the Canadian dollar and the Australian dollar were supported by the bullish influence of higher crude oil prices. INTEREST RATE MARKET FUTURES Some flight to quality buying supported futures as the situation between the U.S. and Turkey appeared to deteriorate.
Despite the recent turmoil in global markets, two more rate hikes from the Federal Reserve are likely this year.
The probability of a fed funds rate hike at the Federal Open Market Committee’s September 26 meeting is 94%, which compares to 96% yesterday.
In addition, it is likely that there will be an additional rate increase in December.
In spite of recent flight to quality buying, the longer term trend for futures is lower, especially for the thirty year Treasury bonds.
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 risk of loss in trading futures and options can be substantial. Past results are not indicative of future results or performance. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. Research analyst does not currently maintain positions in the commodities specified within this report. 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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