Stock Index Futures Advance

STOCK INDEX FUTURES

June S&P 500 futures advanced to their highest level since March 6 and NASDAQ futures are at their best levels since February 21. S&P 500 futures are less than 10% off the record high that was hit in February and NASDAQ futures are not far from historical highs.

Global equity markets are higher as hopes build for more economic stimulus.

The national employment report from Automatic Data Processing Inc. showed a decline of  2,760,000 when down 8,663,000 were expected. ADP said job losses likely peaked in April.

Mortgage applications to purchase a home increased 5.0% for the week and were 18% higher than a year ago, according to the Mortgage Bankers Association.

The 8:45 central time May PMI services index is anticipated to be 36.9.

The 9:00 April factory orders report is anticipated to show a 14.0% decline and the 9:00 May Institute for Supply Management Non-manufacturing index is anticipated to be 44. 

Stock index futures have been performing well in spite of a variety of old and new geopolitical concerns.

CURRENCY FUTURES

The U.S. dollar is lower for the fifth day. Last week the U.S. dollar broke out to the downside and is now at its lowest level since March 13.

There was little support for the greenback when the better than expected ADP report was released.

The euro currency is higher after a report showed euro zone unemployment increased but the increase was less than expected. The European Union’s statistics agency said the number of people out of work increased 211,000 during April, lifting the jobless rate to 7.3% from 7.1% in the prior month.  Economists had expected the jobless rate to rise to 8%.

In addition, there is support for the euro due to optimism over prospects of an E.U. economic recovery plan.

The European Central Bank is expected to expand its bond purchasing program when its governing council meets tomorrow. 

INTEREST RATE MARKET FUTURES

Futures were lower in the overnight trade and there was additional pressure when the better than expected ADP employment report was released.

The next Federal Open Market Committee meeting is scheduled for June 9-10. According to financial futures markets there is a 97.1% probability that the FOMC will leave its fed funds rate unchanged at zero to 25 basis points.

The thirty-year Treasury bond futures are in a broadly based congestion pattern, as the main fundamental influences are offsetting.

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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.

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