February 12, 2019
STOCK INDEX FUTURES
U.S. stock index futures advanced after lawmakers reached a tentative deal to avert another partial government shutdown. In addition, there was support when the U.S. and China expressed optimism about their ongoing trade talks.
Working level discussions started on Monday and will continue through Wednesday. Higher principal level discussions will take place Thursday and Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
Futures are higher in spite of news that the National Federation of Independent Business small business optimism index declined for a fifth straight month.
The NFIB said its optimism index fell to 101.2 in January from 104.4 a month ago. Economists were expecting a reading of 102.
The 9:00 central time December JOLTS report is expected to show 6.9 million. JOLTS stands for Job Openings and Labor Turnover Survey.
Stock index futures have been performing better than the news would suggest since the lows were made in late December.
The U.S. dollar is lower and the euro currency is a little higher.
Higher crude oil prices supported the “commodity currencies,” the Canadian dollar and the Australian dollar.
Oil prices are being supported by OPEC led production cuts. Saudi Arabia said it would reduce production by more than half a million barrels per day.
INTEREST RATE MARKET FUTURES
Flight to quality longs are being liquidated for a second day due to a tentative deal to avert another partial government shutdown and on optimism that progress will be made in the U.S.-China trade talks this week.
Federal Reserve speakers this afternoon are Kansas City Federal Reserve Bank President Esther George at 4:30 and Cleveland Federal Reserve Bank President Loretta Mester at 5:30.
Financial futures markets are predicting an 85% probability that the fed funds rate will remain unchanged at the current level of 2.25%-2.50% this year and there is a 15% chance for reduction in the fed funds rate by 25 basis points in 2019.
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 hint of one, would be the catalyst to take futures lower.
SUPPORT AND RESISTANCE
March 19 S&P 500
Support 2702.00 Resistance 2738.00
March 19 U.S. Dollar Index
Support 96.610 Resistance 97.050
March 19 Euro Currency
Support 1.12810 Resistance 1.13420
March 19 Japanese Yen
Support .90540 Resistance .90940
March 19 Canadian Dollar
Support .75190 Resistance .75600
March 19 Australian Dollar
Support .7052 Resistance .7111
March 19 Thirty Year Treasury Bonds
Support 145^20 Resistance 146^22
April 19 Gold
Support 1308.0 Resistance 1322.0
March 19 Copper
Support 2.7550 Resistance 2.8050
March 19 Crude Oil
Support 52.21 Resistance 54.34
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