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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 traded higher due to signs of progress in the U.S.-China trade talks. Officials from the U.S. and China will meet next week in Washington to continue working on a trade agreement.
The New York Federal Reserve’s Empire State Manufacturing survey’s general business conditions index this month improved to 8.8, which is up from January’s reading of 3.9. The data was better than expected, as economists were predicting a reading of 7.1.
The cost of goods imported into the U.S. declined for a third consecutive month in January. Import prices fell 0.5% in January from the previous month. Economists forecast a 0.3% decrease from December.
January industrial production was down .6%, which compares to expectations of up.1% and January capacity utilization was 78.2% when 78.8% was anticipated.
The 9:00 central time February consumer sentiment index is estimated to be 93.
Stock index futures have been performing better than the news would suggest since the lows were made in late December, which should be viewed as a sign of strength. CURRENCY FUTURES
The U.S. dollar recovered today after the dismal U.S. retail sales report pressured the greenback yesterday.
The British pound firmed on news that retail sales in the U.K. bounced back sharply in January, increasing 1% from the previous month, after declining 0.7% in December. Compared to a year ago, retail sales were 4.2% higher in January, which was the biggest annual gain since December 2016. The figures beat most economists' predictions.
The Canadian dollar and the Australian dollar are higher due to firming crude oil prices. INTEREST RATE MARKET FUTURES
Futures are mostly lower, especially at the long end of the curve.
Atlanta Federal Reserve Bank President Raphael Bostic will deliver a speech at 8:55.
Financial futures markets are predicting an 83% probability that the fed funds rate will remain unchanged at the current level of 2.25%-2.50% this year. There is a 7% chance for a 25 basis point increase in 2019 and there is a 10% probability of a 25 basis point reduction this year.
The thirty year Treasury bond futures have remained in a broad trading range since the first week in January. A U.S.-China trade agreement, or strong hint of one, would be a catalyst to take futures lower.
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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