Futures vs FV: SP +34.83; DJ +351.74; NASDAQ +113.81
Futures on a steady run higher all morning as trade news piles on to the upside. Bloomberg reports that China may cut auto tariffs to 15% from 40%. Trump tweets to expect "important announcements" after a supposedly productive trade phone conference last night. Rumors are the Chinese are now willing to talk about IP. Of course, that is one of the main issues so any speculation would include that.
The result is a solid uptrend and this kind of pre-market has more staying power than the gaps to a higher number that are easy for the shorts to shoot at.
With so many short in the market, this hold of the bottom of the range has the potential to produce a solid rebound inside the range this week. The trade news is providing some gasoline to stoke the smolder at the bottom of the range.
PPI, Nov: 0.1%
Core: 0.3%. year/year 2.7% vs 2.6% prior, moving near a 7 year high.
Final demand: 2.5% vs 2.9% October
Bonds: 2.87 vs 2.863% 10 year
EUR/USD: 1.1368 vs 1.1351
USD/JPY: 114.20 VS 113.28
Oil: 51.79, +0.79
Gold: 1252.60, +3.20
Stocks are set to gap upside and try to put together that move back up in the range. We have picked up some positions and will see if we can get into others as we feel this could be a move that has some staying power behind it.
Jon Johnson, Chief Market Strategist
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