Thursday, January 24, 2019

Market Alert - Pre-Market

Futures vs FV: SP +0.90; DJ -15.82; NASDAQ +25.04

Futures are off the morning trading range. Two simultaneous statements impacted the futures and the question is was it one, the other, or both?

Wilbur Ross: On CNBC Ross was questioned regarding the shutdown, China trade talks, etc. On trade he toed the company line at first but then stated the US and China are "miles and miles apart" from a deal due to structural issues (China is communist and it 'innovates' by stealing other country's and people's technology) and enforcement issues (because history shows you cannot trust the Chinese).

ECB: Leaves rates unchanged, may not do anything with rates until summer as "significant monetary policy remains essential." He concluded with the twist: economic risks are now to the downside.

So, you make the call: Wilbur the talking commerce secretary or dancing Mario.

Futures fell but are managing to recover.

China: Blocks Bing browser. China is desperate. It is attempting to avoid history's march against its form of government and it is flailing about trying to find a solution. Why do you think Xi was made leader for life? Because the system is failing and they were desperate enough to accede to the demands of a megalomaniac. They compare Trump to Hitler but I don't see anyone in the media doing the same re Xi. Look what he is doing to religion and virtually nothing is reported on it. The hallmarks are all there. Very dangerous and if we can use economics to force changes away from another dangerous communist regime, so be it.

Shutdown: Trump delays SOU address. MS CEO says he is "extremely negative" if the shutdown continues. Yes, another globalist worried that the US might continue to turn away from their globalist policies that would damage the globalists' power and wealth status. I am reminded of the first Bond movie with Daniel Craig where M told him 'you learned your lesson, you trust no one.' You cannot believe one thing any of these people say today. They all only talk their book whether it is business, government system, charity, whatever. Nothing can be taken as the honest truth.

Earnings beats: LUV (good guidance though its says shutdown has cost it $15M this month); BMY (BL); AAL (BL); XLNX (ups guidance).

Misses: MCK (BL); F (BL); TXN (TL, lower guidance); LVS (TL, BL)

Bonds: 2.716% vs 2.741%. Bonds start back upside after the test.

EUR/USD: 1.1343 vs 1.1371

USD/JPY: 109.53 vs 109.54

Oil: 52.50, -0.42. Fighting at the 52.50 support.

Gold: 1278.00, -6.00

Futures continue to recover off the Ross/Draghi chicken or the egg effect comments. Still off the prior not so high highs.

The issue for the market today is the same. Two days of testing the break over the resistance. Looks as if today will provide day 3 of a potential 1-2-3 tests of a break.

Jon Johnson, Chief Market Strategist

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