Now we have the trade tensions between the U.S. and China. There were sharp declines in stock index futures after President Donald Trump property abuses. China’s ambassador to Washington said China will take counter measures of the “same proportion” and scale if the U.S. imposes similar duties of up to 25% on U.S. imports, including soybeans, pork, beef, recycled aluminum, steel pipes, fruit, wine, planes, automobiles and chemicals.
Admittedly, the current global trade issues adversely, and rightly so, impacted stock index futures more than most of the other geopolitical extremely uncertain as to when the global trade issues will get resolved. My guess is the trade war will probably continue for a while and, in this futures to advance. However, I believe it is safe to say the trade issues will eventually be resolved and, once they are, the bullish interest rate fundamentals will take over.
Keep in mind that, in spite of the fed funds rate hikes from the Federal Reserve, U.S. interest rates are still relatively low. In addition, with some overseas interest rates remaining near or at historical lows and, in many countries interest rates are still negative, there is still plenty of accommodation left in the domestic and international banking systems to precipitate a new leg up for stock index futures.
Alan Bush
E:
alan.bush@admis.com T: 001 312 242 7911
Source: Provided by QST
15 | ADMISI - The Ghost In The Machine | March/April 2018
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