British Pound Soars After Conservative Party Victory in UK

STOCK INDEX FUTURES

S&P 500, Dow and NASDAQ futures advanced new record highs due to U.S.-China trade optimism, along with the resounding election victory for U.K. Prime Minister Boris Johnson's Conservative Party. The election results dramatically increased hopes for a quick divorce from the European Union. The U.K.'s FTSE 250 index touched a record high.

Prospects for increasing corporate profits and economic growth were enhanced by the developments.

U.S. retail sales increased less than expected in November. The Commerce Department said retail sales rose 0.2% last month when economists forecast retail sales would accelerate 0.5% in November.

Prices for foreign made goods imported to the U.S. increased in November. Import prices were up 0.2% in November from October, which matched expectations.

The 9:00 central time October business inventories report is anticipated to show a 0.2% increase.

My view remains that the global reflation scenario will continue and easier credit conditions, although likely at a slower pace, from most of the worlds central banks are coming and will be the dominant fundamental that underpins stock index futures.

CURRENCY FUTURES

The British pound advanced to its highest level since June 2018, after Boris Johnson secured the biggest Conservative Party election win since 1987. Prime Minister Boris Johnson said the election result meant the Conservative government has been given a powerful new mandate to get Brexit done. Mr. Johnson pledged to take the U.K. out of the European Union by January 31.

Sentiment among Japan's large manufacturers deteriorated to the weakest level in almost seven years during the three months to December, according to the Bank of Japan's quarterly tankan survey.

INTEREST RATE MARKET FUTURES

John Williams, president and chief executive officer of the Federal Reserve Bank of New York will speak at 10:00.

Financial futures markets are suggesting there is a 38% probability that the FOMC will lower its fed funds rate by 25 basis points at its July 29, 2020 policy meeting. Yesterday the probability was 51%.

Interest rate market futures are likely to trade broadly sideways in the longer term, although the flight to quality influence will probably reemerge from time to time.

INDUSTRIAL COMMODITIES

If I am correct in my belief that the global economy is stabilizing, it is likely that the industrial commodities, including copper, crude oil and lumber will advance in price in the long term.

SUPPORT AND RESISTANCE

December 19S&P 500

Support 3153.00 Resistance 3188.00

December 19 U.S. Dollar Index

Support 96.650 Resistance 97.040

December 19Euro Currency

Support 1.11540 Resistance 1.12000

December 19Japanese Yen

Support .91070 Resistance .91600

December 19Canadian Dollar

Support .75800 Resistance .76170

December 19Australian Dollar

Support .6868 Resistance .6944

March 19 Thirty Year Treasury Bonds

Support 155^20 Resistance 157^24

February 19Gold

Support 1462.0 Resistance 1485.0

March 19Copper

Support 2.7700 Resistance 2.8350

January 20 Crude Oil

Support 59.03 Resistance 60.21

Please contact Alan for more extensive information on these markets at 312.242.7911 or via email at alan.bush@admis.com.

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