Written Commentary
by Alan Bush, Senior Financial Economist
STOCK INDEX FUTURES
U.S. stock index futures are lower on renewed U.S.-China tensions.
On the June S&P 500 futures chart there is a double top at the 2965.00 – 2976.25 area.
Jobless claims in the week ended May 16 were 2,438,000 when 2,375,000 were expected.
The 8:45 central time May PMI composite index is expected to be 30.2 and the 9:00 April existing home sales report is anticipated to show 4.325 million.
Although stock index futures are lower currently, I would not be surprised to see a move to higher on the day.
Overall, stock index futures continue to perform well for the news in recent weeks.
CURRENCY FUTURES
The U.S. dollar is lower for a fifth day on the belief that the Federal Reserve could do more to stimulate the U.S. economy.
The euro zone economy remained in a downturn. However, the rate of decline eased. The flash euro zone composite PMI rose from an all-time low of 13.6 in April to 30.5 in May, which is its highest level since February.
The British pound firmed after the release of better than expected U.K. purchasing managers’ indexes for May. The manufacturing PMI came in at 40.6, above both the previous 32.6 and the 36.0 that was estimated by economists. The services PMI was at 27.8, up from 13.4 and above the predicted 25.0. The composite index was at 28.9, up from 13.8 and above the forecast of 25.0. However, all three indexes are well below the 50 level that separates economic expansion from contraction.
INTEREST RATE MARKET FUTURES
The yield on the 10-year U.S. Treasury note ticked down to 0.675% from 0.679% on Wednesday.
Federal Reserve speakers today are John Williams at 9:00, James Bullard at 11:00, Richard Clarida at 12:00, Federal Reserve Chairman Jerome Powell at 1:30 and Lael Brainard at 1:30.
The thirty-year Treasury bond futures are in a broadly based congestion pattern, as the main fundamental influences are offsetting.
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