Futures vs FV: SP +0.57; DJ -1.61; NASD +12.29
After gapping lower on a lower Asia, US futures posting a steady recovery into the hour before the open. Generally good news, interesting news at least, is having a positive impact.
M&A: OXY making a $76 bid for APC trying to leap frog over CVX' $65 bid. At least that makes it more interesting for the shareholders but who knows if any deal closes?
BA: Pulling its share purchase program and guidance due to 737 Max issues.
Trade: US sending a 'high level' delegation to China next week. The hope springs eternal.
China: Supposedly there are 'clear signals' China is scaling back its massive stimulus, as if anything that is news can be a 'clear signal' in a communist regime. Nonetheless, Asian markets are lower.
Earnings Beats: CAT; ANTM; DPZ; SWK; TXN; SNAP. Quite a diverse group.
Misses: T (TL); IRBT (TL)
In line: BA
Mortgage apps: -7.3% vs -3.5% prior. Higher rates hurting again.
Bonds: 2.536% vs 2.57% 10 year. Yield curve holding its more improved status, albeit it is not the picture of health.
EUR/USD: 1.1208, -0.0017
USD/JPY: 111.80, -0.06
Oil: 66.12, -0.12. Down a bit as supply appears adequate.
Gold: 1274.60, +1.40
The large cap stock indices that have not made clearer breaks of the old highs (SP500, DJ30, NASDAQ) are trying to continue the lift. The market enjoys a lot of good patterns right now from stocks that have rallied recently and those that rallied and have put in nice pauses. In short, the upside has more ammunition to move higher if the buyers are ready to enter those stocks.
We plan on looking at how the money rotates and if these good set ups turn into buys or if the market in general wants to pause a bit as the old highs are hit and tested.
Jon Johnson, Chief Market Strategist
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