Futures vs FV: SP +9.04; DJ +47.44; NASDAQ +47.77
China data overnight pushed futures higher. GDP topped expectations as well as loans, credit imports -- the massive credit injection is paying off as you would expect a sugar rush to deliver some relatively quick response.
Earnings are helping as well. NFLX turned from down to up4%. QCOM is extending its huge Tuesday gain that drove SOX higher, adding another 10 points. Other chips are strong as well, however, e.g. INTC.
Beats: MS; PEP; NFLX; CSX
Misses: IBM (TL); UAL (TL)
Upgrades (QCOM - 3 firms); TIF; COG; DPZ
Downgrades: PYPL; BAC; TSLA; SHAK; CMG; DHR; LEN
Trade, Feb: -49.4B vs -54.0B exp vs -51.1B. Chinese imports of US goods really expanded as China tries to play nice to get a less impactful trade deal. It will buy some beans and other items to avoid having to give up stealing tech and IP.
BA: The new 787Max software is operationally satisfactory according to FAA.
MTGS: New homes +1% mo/mo, +7% year/year. Refinancing -8%. Rates moving back up, refinancing -- leading the charge higher for mortgages -- has dropped back and took the overall index negative for the week.
Bonds: 2.61% vs 2.603%
EUR/USD: 1.1302, +0.0022
USD/JPY: 111.99, flat
Oil: 64.44, +0.39
Gold: 1278.20, +1.00
Futures gapped higher in the early morning and built steadily from there. Ramping up the angle of gains as the open approaches. It would appear the combination of China wholly believable data, decent enough earnings, AAPL/QCOM kissing and making up is enough to keep the rally going.
SOX will again lead with its QCOM gains, INTC as well. Nothing wrong with that. Some non-tech areas will work as PEP beat, CSX is solid as always.
Will the other indices show something more than the slow creep higher? As noted, there are some other good results that could push the non-SOX areas. In the bigger picture, all are working toward the old highs as they continue to draw the indices in even with some negative divergences in internals as they do.
Jon Johnson, Chief Market Strategist
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