The Main Event Today is Fed Chair Powell's Testimony

November 13, 2019

STOCK INDEX FUTURES

Stock index futures declined due to doubts about the U.S.-China trade talks.

The main event today will be Federal Reserve ChairmanJerome Powells testimony before the Congressional Joint Economic Committee in a hearing on The Economic Outlook in Washington, DC. at 10:00. Tomorrow Powell willtestify on the economic outlook before the House Budget Committee in Washington, DC. at 9:00.

U.S. consumer prices increased in October, driven by higher energy costs. The consumer price index rose a seasonally adjusted 0.4% in October from the previous month when economists predicted a 0.3% rise. Excluding the often volatile food and energy categories, the core prices, were up 0.2% in October from September, which was in line with economists' expectations.

The November Atlanta Federal Reserve business inflation expectations report will be released at 9:00. The report last month showed inflation at 1.8%.

My view remains that the global reflation scenario is on track and easier credit conditions, although likely at a much slower pace, from most of the worlds central banks are coming and will be the dominant fundamental that supports stock index futures in the long term.

CURRENCY FUTURES

The U.S dollar is stronger, as interest rate differential expectations remain slightly bullish on balance for the greenback.

The British pound is lower after a report showed the U.K. consumer price index fell to 1.5% in October, which was worse than expected.

The Canadian dollar and the Australian dollar, the commodity currencies, are lower following weaker crude oil prices.

INTEREST RATE MARKET FUTURES

Flight to quality buying is coming into the interest rate futures market in light of a less optimistic tone to the U.S.-China trade situation.

In addition to Fed Chair Powell earlier today, other Federal Reserve speakers are Richmond Federal Reserve Bank PresidentTom Barkin at 11:30, Minneapolis Federal Reserve Bank PresidentNeel Kashkari at 12:30 and Philadelphia Federal Reserve Bank PresidentPatrick Harker at 6:30 PM.

There are indications that the global economy is beginning to stabilize, which suggests major central banks are likely to push farther out into the future additional easing measures.

An example of this is todays decision from the Reserve Bank of New Zealand. After two rate cuts this year, the RBNZ in a surprise move, said it saw no urgency to ease policies again. A majority of analysts had expected the RBNZ to cut today.

Financial futures markets are suggesting the Federal Reserve will not be in a position to lower its fed funds rate again until early 2021.

Interest rate market futures are likely to trade only sideways, although the flight to quality influence is likely to reemerge from time to time, as it is today.

SUPPORT AND RESISTANCE

December 19S&P 500

Support 3072.00 Resistance 3095.00

December 19 U.S. Dollar Index

Support 98.050 Resistance 98.340

December 19Euro Currency

Support 1.10130 Resistance 1.10500

December 19Japanese Yen

Support .91720 Resistance .92180

December 19Canadian Dollar

Support .75300 Resistance .75660

December 19Australian Dollar

Support .6823 Resistance .6870

December 19 Thirty Year Treasury Bonds

Support 156^8 Resistance 158^0

December 19Gold

Support 1452.0 Resistance 1473.0

December 19Copper

Support 2.6300 Resistance 2.6550

December 19 Crude Oil

Support 56.07 Resistance 57.21

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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