Futures vs FV: SP -1.53; DJ -24.95; NASDAQ -8.02
If you looked at the news late Sunday or very early today futures were lower and a lot of selling was to come. Instead, stocks caught a bid a little after 7:00ET and moved modestly higher. They have since retraced some of that move and are slightly negative.
Futures dropped for various reasons including China saying it was going to retaliate for the fraud-charged CFO arrested in Canada. Lions and tigers and bears, oh my.
AAPL: Faced with an injunction on sales of iPhones in China based upon a QCOM requested court injunction. AAPL says it only applies to phones with iOS 11 and not the new iOS 12. Glad that is cleared up. More trouble for AAPL is the upshot of this.
M&A: Nutrisystem bought by Tivity Health. TVPT bought by a private group
Downgrades: FDX, Visteon, AAPL (C lowers price target)
Bonds: 2.857% vs 2.854%
EUR/USD: 1.1406 vs 1.1404
USD/JPY: 112.88 vs 112.66
Oil: 51.63, -0.98
Gold: 1250.10, -1.90
Futures rallied to positive but are retracing that bounce in a steady fade back to negative. The indices sold to the Oct/Nov lows Friday with RUTX breaking below those lows on the close. Holding the range and bouncing is the one shot for the bulls. That or a break of support that leads to the algos kicking in to buy. Those are the upside scenarios, and whether you are playing upside or downside, a bounce is the favored action. It allows upside positions to recover, gives a chance to play a bounce in the range, and sets up downside better given Friday was a dive lower to the bottom of the range.
Based upon the action of the futures, a bounce is not a done deal as futures wander from negative to positive and then back. We will be as patient as possible at the bottom of the range.
Jon Johnson, Chief Market Strategist
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