Fiscal Stimulus Proposals Support Stock Index Futures

By Alan Bush

 

STOCK INDEX FUTURES

U.S. stock index futures are higher for a third consecutive day with the S&P 500 reaching its best level since March 6 and Dow futures at the highest level since March 9.

Some of today’s gains took place when the European Commission unveiled plans for an economic recovery fund worth 750 billion euros, or $826 billion.

In addition, investors are encouraged by news that the White House and Congress are considering more measures to address the unemployment situation. The Trump administration is examining proposals that will provide cash incentives to encourage unemployed workers to return to work.

It also looks like ongoing U.S.-China tensions are taking a back seat.

Mortgage applications to purchase a home increased 9.0% last week from the previous week, according to the Mortgage Bankers Association.

The 9:00 May Richmond Federal Reserve manufacturing index is expected to be negative 39.

The technical picture continues to improve for stock index futures.

 

CURRENCY FUTURES

The euro currency is higher after the European Commission unveiled plans for a large economic recovery fund. The announcement came after France and Germany opened the door to issuing mutual E.U. debt last week.

The Canadian dollar and the Australian dollar are lower in light of weaker crude oil prices.

 

INTEREST RATE MARKET FUTURES

U.S. Treasury yields edged up as optimism about economic recovery lifted equity markets and after the E.U., France, Germany and Japan all proposed new fiscal stimulus packages.

James Bullard of the Federal Reserve will speak at 11:30.

The Treasury will auction five-year notes today.

At 1:00 the Federal Reserve will release its “Beige Book” on the economy.

This book is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee. On each occasion, a different Federal Reserve district bank compiles anecdotal evidence on the economic conditions from each of the 12 Federal Reserve districts.

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

In the weeks ahead it is likely that the yield curve will continue to steepen.

 

SUPPORT & RESISTANCE

June 20 S&P 500

Support    2980.00    Resistance    3042.00

June 20 U.S. Dollar Index

Support    98.650       Resistance    99.420

June 20 Euro Currency

Support    1.09300     Resistance    1.10400

June 20 Japanese Yen

Support    .92620        Resistance    .93200

June 20 Canadian Dollar

Support    .72390        Resistance    .72880

June 20 Australian Dollar

Support    .6600           Resistance    .6687

June 20 Thirty Year Treasury Bonds

Support    178^0          Resistance     179^16

June 20 Gold

Support    1680.0         Resistance    1711.0

July 20 Copper

Support    2.3800         Resistance    2.4250

July 20 Crude Oil

Support   33.21             Resistance    34.55

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