Futures vs FV: SP +11.11; DJ +104.68; NASDAQ +42.18
AT&T restructuring, some upgrades, some downgrades, TSLA wants to launch an SUV crossover. Blah, blah, blah. The real news is the breathless reporting that the US/China trade deal is in the 'final stages' of talks and could be completed this month. Futures are said to be up on that news. They definitely jumped Sunday when it broke. The futures today are not so ebullient -- up, but not a party. Cautiously optimistic?
While the reports are a deal is in the 'final stages,' some are reporting (e.g. WSJ) that the deal is likely just dollars, i.e. China buys X dollars of product Y, etc. Contrast that with Larry Kudlow's 'remarkable, historic' deal where he intimated the Chinese vice premiere agreed to Lighthizer's 'riot act' of points needed. Hmmm. It would appear there is no deal until there is a deal, and what is in the deal is nothing until there is a deal. I viewed Mr. Kudlow's comments with skepticism, but I also view the WSJ reporting with the same skepticism. I am still not sure there will even be a deal other than a piece of paper that reads 'trade deal' with nothing else on it.
Upgrades: AMZN, FL; KHZ
Downgrades: BBBY; DDS
Huawei: Sues the US in Texas court regarding the equipment sale ban in the US. I have to ask, just what grounds does Huawei have to sue? Foreign company that does business in the US because the US says so. If the US withdraws that -- based upon apparent reasonable grounds -- what can Huawei really claim? I am sure we will see.
Bonds: 2.744% vs 2.759%. Bonds recover some from the Thurs/Fri selloff.
EUR/USD: 1.134 vs 1.13450
USD/JPY: 111.92, +0.02. Trump bashes strong dollar, dollar up a bit. No cause, no effect.
Oil: 56.47, +0.67
Gold: 1280.60, -10.60. Gold continues its decline after that sharp drop to end last week.
Futures gapped higher, tested, rose back to where they opened. That is where they are right now -- up given the trade news, but not explosively so. A follow through to the Friday strong first of month advance, but it has to show more than just this gap. I know, never satisfied, but the indices still have to take out that resistance.
Jon Johnson, Chief Market Strategist
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