Futures vs FV: SP +2.00; DJ +22.28; NASD +11.67
Futures bounce after the Monday flop, but the bounce is rather weak and struggling some coming into the open. After the close Monday stock futures faded sharply on trade news, but that has subsided some overnight. Still, this bounce at the open looks rather hollow.
Trade: Mnuchin says he anticipates "significant progress" at these trade talks starting Wednesday. So, there you have it.
At the same time, China is livid over the indictment of the Huawei CEO and move for extradition. Shock.
FOMC: Starts its 2-day meeting today
Earnings: AAPL after the close.
Beats: MMM (lower outlook); PFE (lower outlook); AKS (steel)
Misses: VZ (TL); HOG (TL, BL); XRX (TL, increased outlook); WHR (TL); PII (TL).
See the pattern: Top line misses have returned as the economy slowed in Q4 and sales were not as strong as hoped.
Housing: Case/Shiller up but rose at the slowest pace in 4 years. Some slowing here as well even if it is ancient history.
2020: Charles Schultz heckled at a CNBC interview about being a billionaire, etc. He says America does not want the O-O 70% income tax, etc. A social liberal and supposed conservative on economics. Is America ready for that?
Bonds: 2.742% vs 2.748%
EUR/USD: 1.1424 vs 1.1436
USD/JPY: 109.42 vs 109.32
Oil: 52.51, +0.52. Trying to hold at that 52.50 level.
Gold: 1307.10, +4.00
Futures are up as noted, but fading into the open. A steady climb on the morning but a lot of ground to overcome after the selloff Monday afterhours. Not very convincing morning. AAPL to start the 'big' earnings for the week after the close. It definitely has not run up ahead of the results in the quarter where AAPL warned. Okay, it warned, it won't be huge. The question is whether it is worse than expected or not.
We are watching the bounce and of course watching how support holds. SOX and midcaps, the real leaders of late, are also the ones to watch.
Jon Johnson, Chief Market Strategist
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