Wednesday, December 12, 2018

Market Alert - Pre-Market

Futures vs FV: SP +34.27; DJ +318.76; NADSAQ +104.01

Stocks trading higher all premarket, but were goosed over 100 Dow points at 8:45ET when the WSJ announced that China will allow more US company access and will rework/rewrite its China 2025 plan. Trump had said to expect important announcements, and this is important. Did Trump just win the trade war?

There is more to this. We know actual Chinese government operatives, its official hacking team, were fingered with the huge Marriot hack. The DOJ is ready to indict those agents. Canada arrested the Huawei executive who allegedly engaged in fraud regarding deals to circumvent the Iran sanctions. Canada is mad enough to do the US' bidding.

The EU now says that the forced IP transfers must be stopped or regulated.

The point: the world is mad at China's stealing and are standing up to say it must stop. China is a member of the WTO and was allowed in under the conditions it would act accordingly and stop manipulating its currency, dumping on markets, and stop cheating. Instead, it came up with its China 2025 domination plan where theft remains the central aspect. The world is now waking up and saying no mas.

CPI, Nov: 0.0 vs 0.0 vs 0.3 October. 2.2% yr/yr vs 2.5% prior

Core: 0.2 vs 0.2 exp vs 0.2 prior. 2.2% yr/yr vs 2.1% prior

Higher: food (0.2%), rents (0.3%), healthcare (0.4% vs 0.2 prior; +2% yr/yr)

Lower: gasoline (-4.2%)

UK: May faces a no confidence vote but it looks as if she has the votes to survive.

Fed: Trump renews his attacks, saying the Fed would be 'foolish' if it raises rates again.

Cramer at CNBC went as far to say the Fed should CUT rates in December as the quarter is ending weak. This from the man who has up to now said the Fed should hike in December. Today he said he was only saying that to give the Fed 'cover.' Okay then.

Bonds: 2.902% vs 2.884%

EUR/USD: 1.1342 VS 1.1321

USD/JPY: 113.40 VS 113.08

Oil: 52.49, +0.84

Gold: 1249.50, +2.30

Plenty of news to drive stocks right back up after a session where they rallied early with upside gaps only to sell it off. That means another attempted rally off the bottom of the range. At least it is not giving up at support. The issue is whether they hold the gains after another big upside gap. The sellers typically would take a shot at selling the gains at some point in the morning -- it will be telling to see if they try to do so in front of the rather big trade news today.

Jon Johnson, Chief Market Strategist

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