Futures vs FV: SP -11.14; DJ -86.92; NASDAQ -34.19
Futures modeslty lower, just off the morning lows as stocks start a session soft in an ongoing mini uptrend. Soft starts are not bad in such a situation, though the indices are bumping resistance. A bit of a soft open could give them momemtum to take a run at resistance when the bids return, but after 5 upside days that is perhaps a stretch.
CPI, Dec: -0.1 in line vs 0.0 prior. First drop in 9 months.
Core: 0.2 in line vs 0.2 prior. 2.2 year/year, no change
Weekly wages: 1.2 vs 0.6 prior
Hourly wages: 1.1 vs 0.8 prior
Airline fares -1.5% vs -2.4% prior mo/mo
Prescription drugs -4%
Shutdown: Getting a lot more press as it is starting to 'bite' according to articles in the news. It also means less government interference. Yen and yang, good and bad. What won't happen is the media's story that the US is going to decline because of a 3 week government shutdown. We are a country that is supposed to be run by the people not the government. If our country goes into decay and economic decline because the federal government is shut down for a few months then we are on the wrong path.
Upgrades: NFLX, CL
Downgrades: SBUX (china issues according to GS); CME; Hannesbrands
AAPL: Reports that Chinese retailers are cutting prices because consumers are not paying for it. Also, Dan Niles says the slowdown of sales in China is not factored into AAPL's current price.
Bonds: 2.702% vs 2.733%
EUR/USD: 1.1529 VS 1.15075
USD/JPY: 108.15 VS 108.32
Oil: 52.33, -0.26
Gold: 1293.10, +5.70
Soft start sitting on 5 days of rallying. A bit of softness today is not horrific and unless there is a nasty reversal, it likely means the upside is not giving in easily even as it hits the next resistance point in this relief move. Could be this is just day one in another short pullback where the market takes a breather to try and take on the next resistance for a third leg higher in the rally. Lots to be decided at this current level, but it likely won't be decided today but over the next 3 or so sessions.
Jon Johnson, Chief Market Strategist
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