Futures vs FV: SP -7.41; DJ-46.29; NASDA -34.93
Even DJ30 is a bit down heading to the open. Futures gapped lower, have since put in a slow rise toward the bell, cutting into the early losses but still lower.
Jobs: Continuing claims, jobless claims at 1960's lows again.
ISM Services employment sub-index suggests 500K non-farm payrolls for the Friday report. That is now being circulated and I still say it is likely going to be way wrong, but I don't manipulate -- I mean compile -- the data.
Oil: Off a bit today but still in a big surge upside. There are reports, or should I say there is one report, that China has stopped taking supply from the US. One exporter says a pretty good business selling to China has now stopped 'totally.' Why sell to China anyway?
China: Okay, more dumping on China. I talked about not caring if we did not buy its crap, and now more reason for every company to have nothing to do with China. There are better, cheaper options anyway.
Bloomberg reports that a 'Chinese company' (read state owned entity) inserted rice grain sized spy chips into servers used in data centers for roughly 30 US companies AS WELL AS the CIA and DOD. The companies deny this, of course not wanting to look foolish, but the US is in a top secret investigation right now. The denials beg the question: WHAT WERE THE CHIPS FOR THEN? Just put there for a few giggles? Let's see, China is a known IP thief, its military and most economic 'advances' are built on stolen IP from the west, and now products from China show up with a spy chip in them that is supposedly not being used? That is AAPL's argument?
Again, why do we even by anything from China. Lead paint in toys, poison in pet food, spy chips in servers. Why?
China will of course deny, but this is another reason to spurn China. The best way is for manufacturers to go elsewhere, use other labor that is cheaper, make friends with those countries and their partners, and let the market decide. I learned long ago it is a losing proposition to try and do business with liars and cheats. You cannot change them. You can break them, but you cannot change them.
JPM: Downgrades China on what it sees to be a 'full-blown trade war.' Well, there you have it I guess.
BKS: Looking for a buyer. For the past 5 years . . .
Basically backing off from the recent trends/surges. Perfectly normal after such big moves.
Bonds: 3.195 vs 3.183% 10 year. Hit 3.225% on the overnight high.
EUR/USD: 1.511 vs 1.1476. Dollar backs off some after a big surge.
USD/JPY: 114.06 vs 114.38.
Oil: 75.89, -0.52
Gold: 1207.20, +4.30
Futures continue a steady recovery toward the bell, indicating there is still a bid present even if there is some profit taking and selling rotation after the last pretty decent rally. We still want to ride out this pullback within reason and be ready to move in after NASDAQ, SP500 complete their tests. SP400 and RUTX? Bias is still down until they prove otherwise.
Jon Johnson, Chief Market Strategist
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