Futures vs FV: SP -8.98, DJ -110.51, NASDAQ -22.71
Futures started higher early, early, but sold as the morning progressed. After the NY Empire PMI missed big futures really fell with DJ30 futures moving from -85 to -164. They have since recovered off the lows, but still a slow open is coming on the heels of the Friday selloff.
The Fed is on tap WED, while ECB and BOJ also make decisions this week.
Xi from China delivers a speech Tuesday.
NY Empire PMI: 10.9 vs 21.0 exp vs 23.2 prior. A 19 month low. That spooked markets already afraid of the Fed hiking into a slowdown, turning it into a recession.
Fed: Trump tweets it is 'incredible' the Fed is considering another hike at this time.
Druckenmille, Warsh also say the Fed should not be hiking right now, that the Fed should have started hiking years back. They were making that call years back as well, so they are not coming late to the table.
Drugs: Under pressure after a Texas federal court ruled the ACA is unconstitutional given Congress' rewrite that removed the individual mandate, the very element the Supreme Court focused on to rule the ACA constitutional. Without it, the Court has already ruled it is a commerce clause violation. Unless the Court wants to just fly by the seat of its pants it should uphold the ruling.
Upgrades: LULU; SWK; SHW
Downgrades: BBY (slow TV, iPhone sales)
Bonds: 2.884% vs 2.895% 10 year
EUR/USD: 1.1344 vs 1.13049
USD/JPY: 113.09 vs 113.382
OIl: 51.35, _0.15
Gold: 1245.80, +4.40
Down Fridays lead to down Mondays in selling and that is the truth at the start. Perhaps a further selloff to start the week on MON/TUES delivers a cathartic event. Perhaps not. Will see if the downside start yields downside entries or leads to a bounce.
Jon Johnson, Chief Market Strategist
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