Traders Focus on Coronavirus Implications
Alan Bush - ADM Investor Services - 47 minutes ago
January 23, 2020
STOCK INDEX FUTURES
Stock index futures are lower due to rising worries over the coronavirus outbreak in China that prompted a lockdown of two cities in the country.
There was little market reaction when President Donald Trump in his address at the World Economic Forum's annual meeting in Davos, Switzerland said America's economy is the strongest it has ever been.
Initial jobless claims increased 6,000 in the week ended January 18 to a seasonally adjusted 211,000. Economists expected 215,000 new jobless claims.
The 9:00 central time December leading indicators composite index is expected to be down 0.2% and the 10:00 January Kansas City Federal Reserve manufacturing index is anticipated to be negative 8.
Of the 58 S&P 500 companies that have reported so far, 67.2% have surpassed Wall Street's profit estimates, according to Refinitiv IBES data.
I anticipate U.S. stock index futures will to trend higher in the first quarter.
CURRENCY FUTURES
The euro currency is lower after the Governing Council of theEuropean Central Bankdecided to leave the interestrateson the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively, as had been expected.
Analysts currently believe the ECB will remain on hold for at least the next 18 months, based on financial futures prices.
The Swiss franc is higher even though Swiss National Bank President Thomas Jordan said the Swiss franc is still highly valued.
The Japanese yen advanced in a flight to quality move amid worries about the spread of the coronavirus outbreak in China.
INTEREST RATE MARKET FUTURES
Futures are higher due fears that the coronavirus outbreak could damage global growth. There is a 65% probability that the Federal Open Market Committee will lower its fed funds rate at its December 16, 2020 policy meeting. Yesterday the probability was 61%.
Interest rate market futures are likely to trade broadly sideways in the longer term, although the flight to quality influence will likely reemerge from time to time.
SUPPORT AND RESISTANCE
March 20S&P 500
Support 3298.00 Resistance 3325.00
March 20 U.S. Dollar Index
Support 97.140 Resistance 97.520
March 20Euro Currency
Support 1.10880 Resistance 1.11500
March 20Japanese Yen
Support .91240 Resistance .91660
March 20Canadian Dollar
Support .75850 Resistance .76200
March 20Australian Dollar
Support .6838 Resistance .6895
March 20 Thirty Year Treasury Bonds
Support 158^20 Resistance 159^30
February 20Gold
Support 1549.0 Resistance 1568.0
March 20 Crude Oil
Support 54.75 Resistance 56.55
March 20Copper
Support 2.7250 Resistance 2.7750
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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