Indices Sharply Higher on Limited News

STOCK INDEX FUTURES

Stock index futures are sharply higher on limited news.

Thursday of last week a major downside chart objective was hit in the S&P 500 futures using the midway congestion pattern, measured move technique.

Retail sales in April increased 0.9% when up 0.8% was expected.

The 8:15 central time April Industrial production report is anticipated to be up 0.4% and April capacity utilization is estimated to be 78.6%.

There are two 9:00 reports. March business inventories are estimated to be up 1.8% and the May housing market index is predicted to be 75.

The main event today will be Federal Reserve Chairman Powell being interviewed at 1:00.

CURRENCY FUTURES

The euro currency is higher on news that across the 19 countries that use the euro as their currency, gross domestic product grew 0.3% on quarter in the first three months of the year. Economists forecast the economy to grow by 0.2%.

In addition, the euro was supported as traders priced in a more aggressive pace of monetary policy tightening from the European Central Bank after an official raised the prospect of larger rate hikes this year.

European Central Bank Governing Council member Klaas Knot became the first euro zone official to suggest a possible half-point interest rate hike if inflation risks worsen, though he backs a smaller move currently.

The unemployment rate in the U.K. edged down to 3.7% in the first quarter, which is the lowest reading since 1974 and below 3.8% in the previous period and forecasts of 3.8%.

INTEREST RATE MARKET FUTURES

Flight to quality longs are being liquidated in light of sharply higher stock index futures.

Other Federal Reserve speakers today are Patrick Harker at 8:15, Loretta Mester at 1:30 and Charles Evans at 5:45.

Financial futures markets are predicting there is an 85.4% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 14.6% probability that the  rate will increase by 75 basis points at the June 15 policy meeting.

The interest rate market futures appear to be making a bottom on the charts.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

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 ADM.  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.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now