Corporate Earnings Reports Support Stock Index Futures
Alan Bush of ADM Investor Services - InsideFutures.com - Mon Oct 21, 9:45AM CDT

October 21, 2019

STOCK INDEX FUTURES

U.S. stock index futures are higher on limited news. However, it appears that recent strength in stock index futures is partially due to the surprisingly better than expected third quarter corporate earnings reports despite the slowing global economy.

My view remains that the global reflation scenario is on track and easier credit conditions from most of the worlds central banks, including the Federal Reserve, are coming and will be the dominant fundamental that supports stock index futures in the long term.

CURRENCY FUTURES

The euro currency rallied to its highest level in almost two months against the U.S. dollar after GermanysBundesbanksaid the economy might have contracted again in the third quarter, but a deep recession is not in the cards.

The British poundadvanced to a 5-1/2 month high after earlier losses when the Northern Irish Democratic Unionist Party said it would not support any amendments to the Brexit agreement for a customs union with the E.U.

The Japanese yen is lower on news that Japan's exports declined for the tenth consecutive month in September. Japan's exports fell 5.2% on the year last month, which was weaker than the 4.0% contraction that was forecast.

The Bank of Japan will hold a policy setting meeting on October 31 and will release an outlook report on the economy and prices.

The Bank of Japan Governor Haruhiko Kuroda recently said it could certainly cut rates again if needed.

The Australian dollar is higher even though the International Monetary Fund, in its World Economic Outlook report, said the Chinese economy could grow at 5.8% next year, which is slower than the 6.1% forecast for 2019. Australia and China are major trading partners.

INTEREST RATE MARKET FUTURES

Futures are lower in response to higher stock index futures.

Federal Reserve Member of the Board of GovernorsMichelle Bowman will speak at 10:40.

Market participants believe there is a 91% probability that the Federal Open Market Committee will lower its fed funds rate by another 25 basis points at the October 30 policy meeting. On Friday the probability was 83%.

In the longer term, higher prices are likely for futures, especially at the long end of the curve, as most major central banks, including the Federal Reserve, are under pressure to become more accommodative.

SUPPORT AND RESISTANCE

December 19S&P 500

Support 2981.00 Resistance 3008.00

December 19 U.S. Dollar Index

Support 96.850 Resistance 97.200

December 19Euro Currency

Support 1.11860 Resistance 1.12280

December 19Japanese Yen

Support .92250 Resistance .92680

December 19Canadian Dollar

Support .76100 Resistance .76440

December 19Australian Dollar

Support .6844 Resistance .6898

December 19 Thirty Year Treasury Bonds

Support 159^8 Resistance 160^20

December 19Gold

Support 1488.0 Resistance 1505.0

December 19Copper

Support 2.6300 Resistance 2.6600

December 19 Crude Oil

Support 52.60 Resistance 54.33

Contact Alan for more extensive information on these markets at 312.242.7911 or via email at alan.bush@admis.com. Thank you.

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