Alan Bush

ADM Investor Services, Inc.

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.


Tel: + 1 312 242 7911
Email: alan.bush@admis.com


October 19 2018 Commentary by Alan Bush | follow us on Twitter @TradeADMIS   

STOCK INDEX FUTURES

U.S. stock index futures are higher in spite of rising U.S. interest rates, Italy’s expanding budget deficit issue with the European Union and risks from China’s slower economic growth.

China's economy grew 6.5% in the third quarter, the weakest pace since 2009, which is down from a 6.7% rate in the second quarter. The result fell short of forecasts of 6.6%.

The 9:00 central time September existing home sales report is expected to show 5.3 million.

Corporate earnings today have been mostly stronger than anticipated.

Earnings at S&P 500 companies in the third quarter are expected to have increased almost 22% in the quarter. 

The still relatively low interest rate environment and, in my opinion a likely less hawkish Federal Open Market Committee next year, suggests recent weakness is a correction and we have not seen the top for stock index futures.

CURRENCY FUTURES

The euro currency declined after the European Union criticized Italy's spending plans.

Euro zone financial markets are now not fully pricing in an interest rate increase from the European Central Bank until October 2019. Earlier this week, they were predicting an increase next September.

The British pound is lower in spite of news that U.K. government's borrowing touched an 11 year low in September. 

The Canada dollar fell after it was reported that Canadian retail sales fell unexpectedly in August. Statistics Canada said retail sales decreased 0.1% in August from the previous month. Market expectations were for a 0.3% increase. 

Also, there was pressure on the currency of Canada when it was reported that Canada’s consumer price index rose 2.2% on a year-over-year basis in September, following a 2.8% increase in August. Market expectations were for a 2.7% gain in September. 

INTEREST RATE MARKET FUTURES  

Futures are steady at the short end of the curve and lower at the long end.

Federal Reserve speakers today are Atlanta Federal Reserve President Raphael Bostic at 11:00 and Dallas Federal Reserve Bank President Robert Kaplan at 11:45.

According to the financial futures markets, the probability of a fed funds rate hike at the Federal Open Market Committee’s December 19 policy meeting is 81%, which compares to 84% yesterday.

The long term trend for the interest rate futures is 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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