Futures vs FV: SP +0.34; DJ -1.84; NASDAQ +19.74
Futures started higher but took a hit at 6:30ET as earnings started to hit and were misses from JPM, WFC. Dimon says if the shoutdown lasts a quarter GDP could go to zero. Yes, I guess the US is wholly driven by the government. I tell you this: if GDP would go to zero as a result of a federal government shutdown, the government is too damn big (as if we did not know that). Does anyone need a better yardstick as to whether the federal government is too big?
Shutdown: JPM's Dimon has his say. A White House source told CNBC that the WH has doubled its estimate of the impact of the shutdown to -0.1% GDP per week versus -0.1% every two weeks. Further, a WH source says it would be great if the government remained shut down for a very, very long time in order so shed a lot of government waste permanently.
PPI, Dec: -0.2 vs -0.1 exp vs 0.1 prio. Yr/yr +2.5%
Core: -0.1 vs +0.2 vs 0.3. Yr/yr 2.7%
Final demand: -0.2%
Empire PMI, Jan: 3.9 vs 12.2 exp vs 11.5 prior (from 10.9)
Earnings beats: UNH, DAL (BL)
Misses: JPM (BL); WFC (TL)
Upside pre-announcement: PLAY
Downside pre-ann: SHW
JPM, WFC: worst performances in some areas since the financial crisis.
France: Government issues semi-automatic weaponry to the police to fight the yellow vests. Apparently there is as much seething anger in France as in other places i the world. Revolution to overthrow monarchies, then a couple of hundred years pass and the government again usurps the individual's liberty and there is some form of revolution occurring again.
Bonds: 2.681% vs 2.706%
EUR/USD: 1.1436 vs 1.19734
USD/JPY: 108.36 VS 108.34
Oil: 51.27, +0.76
Gold: 1291.60, +0.29
Futures dropped sharply when the bank earnings and other commentary about the shutdown impact were released. The decline overall is neglible as the market is 'handling' it just fine. Again, the indices are not being repulsed by the resistance, and a lateral consolidation of the last leg just below resistance is not bad action at all.
Thus, we see if the bids return after 3 to 4 days of lateral rest.
Jon Johnson, Chief Market Strategist
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