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Thursday, November 9, 2017

Market Alert - To the Close

A pretty decent rebound from midday has SPY back to the midmorning bounce point. That still leaves it and the other indices lower, but a solid enough rebound is in progress for all . . . but SOX.

SP500 -9.33; -0.35%
NASDAQ -38.52, -0.57%, Almost 65 points off the low
DJ30 -99.05, -0.42%
SP400 -0.57%
RUTX -0.51%
SOX -1.99%

The Senate tax bill is a thing of wonder. Business gets a tax rate cut to 20% -- in a year. You know what they say: a tax rate cut deferred . .

7 brackets, the top reduced a smidge.

Death tax continued but the exemption amount doubled.

IRA's remain, SALT deductions jettisoned.

Standard deduction doubled, child credit raised.

Pass throughs get a deduction -- well that is the 'my parents went to Hawaii and all I got was this t-shirt' part of the bill. Screw the small businesses; reward the big corps and those not paying taxes already.

In short, it is not reform, just tweaking. What a surprise. And from THIS Senate.

The BTD is working, more or less, and it looks to be picking up steam at the end of the session. It needs it; stocks rebounded, but not all that robust. Chip stocks are still very heavy, still struggling.

As for buys, ZUMZ looks interesting; yes, ZUMZ. FB could be good but don't have to rush on more positions on it. Never enough of a dip in AMZN to pick up more. HUBS looks weak and will see if other chips can rebound a bit better into the close.

Jon Johnson, Chief Market Strategist
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Market Alert - Morning Session

After a decent bounce off the opening low that tested and moved higher again, stocks are back at session lows and indeed cutting into new session lows.

Taxes are mentioned as one reason, but word out of the Middle East remains so rapid and volatile it is likely the real culprit. Saudi Arabia King is rumored to pass the torch to the crown prince as soon as this week. Saudi orders its citizens out of Lebanon in what is taken as a big step toward open conflict.

All indices are down with SOX and NASDAQ leading but the others are not far behind.

SP500 -18.31, -0.71%
NASDAQ -68.70, -1.01%
DJ30 -168.42, -0.71%
SP400 -0.69%
RUTX -0.54%
SOX -2.30%
NASDAQ 100 -1.07%

Note how SP500, DJ30, SP400 down equivalent amounts. Pretty even selling with the recent leaders taking more fire, often the case.

The moves have NASDAQ at the 10 day EMA, trying to hang on.

SP500 is below the 10 day, dangling over the 20 day.

DJ30 broke the 10 day rather easily and is also hanging over the 20 day.

SP400 is below the 20 day MA modestly.

RUTX is the relative strength leader as it avoided the Christmas rush and sold before the other indices. It is holding the 50 day MA's.

SOX gapped and continued lower to the 10 day EMA. That is quite a drop given the prior move.

A selling round hit the past hour that brought on some new session lows and panic. Watch to see if that is a false break and spurs some buying off an intraday double bottom. Will see if that plays out and if the afternoon session enjoys a change of character or continues to roll around in angst.

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP -13.53, DJ -109.36; NASDAQ -50.34

The BTD faithful will have one heck of an opportunity to step in today as futures trend lower all morning toward the bell. A modest bounce starting 8:00ET has fizzled as stocks hold near the morning lows.

The selling started when Japan's market hit a new high then sharply reversed to -2%. It managed to recover to close down just -0.2%. Now THAT is a reversal both from the high and from the low in one session. The BTD crowd certainly went to work there, but it would appear the rest of the world has to go through the same process itself, if it can.

Even with the recovery, however, that kind of volatility after a good run higher is typically not a good thing. The bigger picture item to watch for in the US is whether VIX is rising with stock prices. It is not the case in the US now, i.e. no trend higher in VIX on this last stock market rise. That indicator, is often an early warning indication of a major top forming. Again, not happening right now. Doesn't mean you don't get corrections . . .

China: Trump comments in China are blamed by some for the selling. Trump said Chinese trade with the US is unfair (nothing new), gave China 'credit' for taking advantage of the US the way it did. He said that was all before his buddy XI took over, however, and they announced $250B in trade deals. Of course, as is the case with anything he does, many are saying those deals have no substance.

Retail earnings are also a designated scapegoat for the weak open. KSS, S, PRTY and others are out.



Taxes: The Senate bill is back on for release today and is said to have a different rate structure and eliminates SALT deductions. If there is to be true reform the deductions for what the individual states decide to spend has to be eliminated. It is logically inconsistent to allow states who chose different forms of taxes to deduct those from the federal rate. That is the state income tax, property tax issue that will impact many so hard. It is the ripping the band aid off analogy mentioned Wednesday. Lots of pain at first but ultimately better. Once they are in place, however, very, very hard to remove because of the pain it causes but it causes a bigger problem overall. That is why you don't mess with these things. Just have a flat tax at a low rate it cannot rise above, and be done. 6% would work, perhaps up to 9%, but no more. Stop all the other manipulation and be done with it. OR just go to a consumption tax, not a VAT, a one-time consumption tax paid by the end user. Then it is the choice of the buyer, and it also promotes GOOD economic policies to foster a strong economy and confident consumers that WANT to spend. Bad policies result in bad economics and low tax levels. Provide an incentive for the government to promote policies that work, that history shows work. I know, I Know, a pipe dream that the government would actually believe in markets.

Bonds: 2.335% vs 2.326%

EUR/USD: 1.1624 vs 1.1587

USD/JPY: 113.34 vs 113.98

Oil: 56.90, +0.09

Gold: 1288.00, +4.00

Again, the BTD faithful will have their faith tested. Worked in Japan but again, it is not great to see this start.

THAT SAID, recall I talked of SHARP drops in the 1999 rally at Thanksgiving. Two HARD days of selling on volume, then nothing but net to the upside through March 2000. Strong moves in place, nothing has changed in the bigger picture outside the Tax issue and the questions there. Maybe that is the anchor chain, but watch for the big names and how they respond today. Small caps -- don't expect much unless the Senate tax plan is met with euphoria. Did I say pipe dream?

Jon Johnson, Chief Market Strategist
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Wednesday, November 8, 2017

Market Alert - The Close

Wednesday was no major recovery from the Tuesday doldrums and RUTX' dive lower, but once again it showed the bids could not stay away. The pre-market was lower, but some bids did return to push the indices positive, albeit modestly. Growth fared a bit better, a flip from Tuesday, and NASDAQ 100 led the entire market as AAPL, AMZN, GOOG posted very decent moves.

SP500 3.74, 0.14%
NASDAQ 21.34, 0.32%
DJ30 6.13, 0.03%
SP400 0.30%
RUTX 0.18%
SOX 0.35%
NASDAQ 100 0.40%

VOLUME: NYSE -3%, NASDAQ -5%. Lower but also still above average on each exchange. Not as much buying as Tuesday churn and downside, but traded did not fall off the cliff on a rebound session.

ADVANCE/DECLINE: NYSE 1.04:1; NASDAQ -1.05:1. Talk about large cap days; NASDAQ breadth negative with NASDAQ up a third percent.

The tax reform questions continued as the Senate now looks as if its bill -- why does it have its own bill without working on the House bill? -- will not be out until Thursday, showing that Mitch McConnell's slip from earlier in the week was telling the truth though, as is always the initial reflex in DC, an attempt was made to cover it up.

Then you have the governor elections in the blue states of VA and NJ where the democrat candidate won and that is being reported as some repudiation of what Trump and SOME in the GOP want to get done. I would posit, however, it is BECAUSE the GOP is not really attempting to implement the winning platform that the GOP base was not enthused and any possible converts saw no reason to change votes. IF they had got on the ball, perhaps some positive changes would already be in the works. No, there is more at work than anyone wants to talk about.

With the backdrop the same as Tuesday, there was not much change in investor/trader preferences for the various stock sectors. All indices maintained their relative positions in their patterns despite the percentage gains flipping back to the growth sectors' favor.

That means SOX, NASDAQ remained the most recent leaders, punching out nominal new highs, while SP500 did the same as it continued a very decent move up its 10 day EMA. DJ30 continued to rest in its uptrend over the 10 day EMA, while the SP400 midcaps tested the 20 day EMA again (bouncing off the lows to hold the trend). RUTX rebounded for a very modest gain, particularly compared to the strong Tuesday selloff.

But RUTX, as noted, was not that bad. Yes it closed with a most modest and inconsequential percentage price gain. It is how RUTX did it that matters. We anticipated RUTX would reach down to the 50 day MA at a minimum on this test, and it did it right away. More than that, RUTX bounced very nicely off that test, coming in positive and showing a nice doji with tail. Tested the 50 day, found buyers, jumped back to close positive. It still has the 38% Fibonacci retracement at 1451 (reached 1469 on the intraday low) that beckons; for now, however, it showed very good action at the 50 day MA.

We picked up some BWLD and JNJ, took some gain on SQ ahead of its earnings. There are still some very interesting upside setups as new plays continue to form up. Definitely looking at more of those as the rally, despite being panned and moving slowly at times, is sending many stocks higher, some sharply so.

Have a great evening!

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP -2.14; -3.23; NASDAQ -3.53

After futures dropped afterhours Tuesday on the afterhours earnings, tax reform problems, and election results, futures improved upside overnight. Trading in a range all pre-market, now showing modest losses. Oh no; losses. Only in THIS upside market is a soft open considered possible major carnage. In all other uptrends in history, a softer open is not bad as it gives buyers the opportunity to come in and bid stocks.

News is rather light.

Earnings mostly okay but big stupid stocks such as SNAP were horrible, but even it recovered after someone threw a bunch of money on this 'dip' that looks like a collapse. I mean when your CEO says the app, THE product of the company, is hard to use, wow.


Misses: HUM (TL); SNAP (everything)

TGT: Closing 12 underperforming stores in various states. I have not been in TGT in years, don't plan on going into one. No point there, just noting my utter lack in TGT as anything other than a possible trade now and then.

China: President is in China and is receiving a huge welcome from the Chinese people. Apparently THEY like his wealth, opulence, outspokenness. He is trying to cobble a coalition to support NKorea in giving up its nuclear program.

Election: Dems won governors in blue states VA, NJ. New York re-elected the socialist; talk about blue states.

Taxes: Senate is going to introduce its own bill on Thursday. House bill to be marked up by the weekend. Does this sound pathetically familiar, e.g. the healthcare absurdity? Republicans are pathetic. Pathetic. And they wonder why the party is imploding -- they get the power, they don't know what to do with it other than pee themselves. Did I say pathetic? I understand the reform aspect: states with low costs because they don't try to provide everything to everyone for free OR they are just more efficient don't want to subsidize those states with huge sate tax bills by allowing them to deduct their state taxes from their federal taxes owed. I get that. This is the problem you get when you have unconstitutional items the Founders saw would be a problem and thus barred are subsequently allowed. People from one state should not have to subsidize those of another state and that is what the reform is trying to accomplish -- as one part of the plan. But, the deduction is now at 'entitlement' status and thus you have the incongruity of cutting taxes yet raising taxes at the same time. Ripping the bandage off is painful.

The end result: RUTX broke support and is going to test the 50 day MA, likely the 38% Fibonacci retracement. that means for now the rally will need to focus on larger caps -- as it started to do the past two weeks.

Bonds: 2.313% vs 2.316%. Somewhat flat after the surge higher.

EUR/USD: 1.1592 vs 1.15915

USD/JPY: 113.53 VS 113.782

Oil: 56.98, -0.22. Oh no, oil is lower so the rally must be over because it was only about Saudi Arabia. Not.

Gold: 1282.00, +6.20

Futures continue to hold their morning slug-like action. Again, in an uptrend that is not bad as it allows bids to enter. The issue is how hard the tax reality hits.

Jon Johnson, Chief Market Strategist
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Tuesday, November 7, 2017

Market Alert - Last Hour

All stock indices are lower with growth, outside of SOX, taking it hardest. Particularly nasty is RUTX (-1.32%) as it breaks sharply lower, undercutting the late October lows and pushing on the 50 day EMA.

SP500 -3.73, -0.14%
NASDAQ -26.39, -0.39%
DJ30 -26.69, -0.12%
SP400 -0.78%
RUTX -1.33%
SOX -0.25%

There are some taking hard punches: financial, broadcast (including NFLX), some retail (TGT, BBY).

Others are holding up fine: most FAANG, software, chips remain in good position.

One person on CNBC talked about a 'key reversal.' Not seeing it yet. What we are seeing is small banks yanking RUTX lower; big banks are hit hard as well. Perhaps the quick test we thought would come in late September/early October will show up now and set the stage for a year end rebound. Perhaps. Again, not seeing major reversals all over.

There are some positions we will look at closing because of their breaks to the downside that are not rebounding in all cases.

Volume is higher on NYSE as RUTX drops hard; some dumping of those stocks.

Given this action it does not appear time to pull the rip cord on the upside. Always be cautious and skeptical, but the big names that just broke out are not extended, and a day off is not a reversal.

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP +0.47; DJ +20.58, NASDAQ -4.51

Futures are mixed and sluggish as the moves of the past several sessions somewhat reverse in terms of the roles of leaders and followers. NASDAQ is weaker while DJ30 comes back some.

Lots of talk of bubbles, crashes to come, basic end of markets talk. Things have never been so bullish you hear. Or the optimism seen now is the same as in the dotcom bubble. I have said it before: all of the optimism, overvaluation, overbought, etc. conditions do not matter until they matter. Moreover, does it have to be a crash and burn? I have found that usually truth is in between the extremes. Seems simplistic, almost stupid in its simplicity, but it is a good reality check when you read each day things will never go down versus things are just about to end as we know it.

DIS and Fox talking DIS acquiring Fox' entertainment arms.

Elections: Virginia and New Jersey being watched today for broader implications.

Oil: More are saying the recent surge will all end when the Middle East tensions ease. yes, it may come back some, but I would counter that the move was set up, as noted here, weeks and weeks before the Saudi news hit.

North Korea: Trump softens, says he believes they are making progress. Offers talks to figure out how NK can disarm and be part of the normal world. Nice try, but Good luck.

Middle East: Yemen threatens attacks on S. Arabia after 'declaration of war.'

Bonds: 2.32% vs 2.32% 10 year. Flat after a rebound.

EUR/USD: 1.1566

USD/JPY: 114.09

Oil: 57.34, -0.04

Gold: 1278.40, -3.20

Futures are rallying toward the open with a lot of renewed vigor. Perhaps the BTD has returned and is ready to move after 5 days upside and a pre-market dip. We will continue looking for opportunities to enter.

Jon Johnson, Chief Market Strategist
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Monday, November 6, 2017

Market Alert - The Close

SOX and NASDAQ led the market higher as all indices again posted gains. AVGO made its intentions for QCOM official and they both helped drive SOX higher, but the closed off their highs while SOX did not -- other chips were clearly engaged upside.

The midcap SP400 and the large cap SP500 were not chicken feed, though DJ30 and RUTX clearly brought up the rear, up, but no game changers.

Indeed, nothing was really a game changer. Just more of the same from last week with the large cap tech and chips enjoying most of the upside interest.

SP500 3.29, 0.13%
NASDAQ 22.00, 0.33%
DJ30 9.23, 0.04%
SP400 0.40%
RUTX 0.20%
SOX 1.34%
NASDAQ 100 0.29%

VOLUME: NYSE +5%, NASDAQ -3%. NYSE trade back above average after a drop off from 8 straight sessions over average. NASDAQ trade was lower but remained solidly above average as it has for nine straight sessions. All upside for NASDAQ as the money is definitely moving its way.

ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ 1.2:1. Definitely noncommittal -- at least outside of the large cap techs. Very narrow move is driving the upside action. At least it is an improvement over Friday that saw NASDAQ A/D negative as NASDAQ put in a quite solid move. Again, all large cap tech.

Thus, the indices continued their same performance, i.e. upside, as well as their relative performance, i.e. NASDAQ and SOX leading, SP500 and SP400 not too far back and mimicking one another, while DJ30 and RUTX just tag along.

Oil stocks saw some solid action. The patterns were setting up, good moves were starting, oil was breaking out of its range. Then the Saudi Arabia weekend events let fly (corruption roundup and 'arrests' of some very big and wealthy names; interception of a missile fired from Yemen, TWO princes killed in separate incidents, the second in a firefight when he was to be arrested) and oil rallied even more (57.35, +1.71), putting a good move on the top of the range (54.90 - 55.00). This helped break some plays higher and we picked up a couple.

Chips as noted enjoyed another good session and we banked some more AVGO gain on the gap higher. Software still solid. FAANG up nicely, at least FB, AAPL, AMZN; GOOG is testing some and that is what we wanted. Retail saw some good action from KORS and its earnings, SIG, though it was not across the board. Indeed, no leaders are up across the board. The moves are somewhat specific, but the patterns are there and they are working. Again, it is narrow, but if you go where the money is, as we are, the moves are there and so is some very good money.

We picked up some DO and SN in oil, NATI in software, AMZN and SIG in retail. Afterhours was not an earnings love fest, however. PCLN, TRIP, TRUE, RRGB were not bad, but guidance and slight misses are punished. WTW is up nicely on its results while CRM is up 3+ clicks on news it is joining with GOOG on some cloud services. Strong get stronger while the rest are still culled.

This market move is narrow and specific. Yet, it is enough to drive the entire market higher. At some point not, but with the new breakouts from some big names that put in their time and broke higher again, it has leadership that can as we have seen before, even with narrow breadth.

Have a great evening!

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP -1.54; DJ +7.81; NASDAQ +1.17

Geopolitical, Domestic, and stock news dominate the start of the week. While futures were lower Sunday, US futures have recovered from modest losses and at rising into the US open.

Saudi Arabia: Missile strike out of Yemen considered an 'act of war' by SArabia. Corruption crackdown as several princes 'arrested' and held at the Ritz Carlton. Saudi Plunge Protection Team rescued its market. Seems to be the MO for market declines, event related or not.

Taxes: House starts the debate and markup of the tax proposal today. Already there are some good amendments that will be offered and accepted. It is of course much about the special interests and their fight to keep their reason for existing alive.

M&A: AVGO makes its bid for QCOM official; both stocks are up yet again to start the session.

S/TMOS call off their attempted merger. too many egos in the room.

AET/CVS trying to get their deal closed.

INTC/AMD joint venturing to create a graphics chip that will take on NVDA.

Fed: Dudley to retire mid-2018, well ahead of the end of his term.

Earnings: Many more report this week.
BEATS: KORS crushed expectations.

Misses: MYL (TL, BL); Berkshire Hathaway

Bonds: 2.322% vs 2.332% 10 year. Up given the world issues, namely Saudi Arabia.

EUR/USD: 1.1586 vs 1.16092. Dollar continues strengthening.

USD/JPY: 114.10 vs 114.06

Oil: 55.94, +0.30. Oil higher on the worries in the Middle East, but oil broke out last week from its trading range. It is now a matter of whether it can hold the breakout.

Gold: 1272.10, +2.90

Futures started early morning lower, but as the Saudi PPT rescued that market, futures improved. While mostly lower toward the open, they have trended back upside.

Last week was dominated by the large cap techs, chips, and even SP500 improved its pattern. This week we watch for the FAANG and other large cap tech, financial as well, continue moving higher. We will see if some other areas join, e.g. oil.

A bit of weakness on the open and you may see the BTD faithful return again given an opening to pick up AMZN, FB, etc. at a 'better' price.

Jon Johnson, Chief Market Strategist
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Friday, November 3, 2017

Market Alert - Pre-Market

Futures vs FV: SP +2.40; DJ +31.79; NASDAQ +37.16

Futures are at the morning highs but have range-traded since the open. No trend higher but holding a gain. Of course, as seen time after time the past three weeks in the increased day to day volatility, the pre-market does not often reflect the morning action. Stocks will start higher, however, buoyed by the AAPL earnings, and as anticipated AAPL's coattails are helping AVGO, SWKS, etc.

Jobs: 261K vs 300K vs 18K (from -33K); Aug revised up 39K, so 99K jobs added back the 2 prior months.

Unemployment: 4.1 vs 4.2 vs 4.2. But, it was an exodus from the workforce that caused the drop.

Wages: 0.0 vs 0.1 vs 0.5 prior

Participation: 62.7%. Labor force -765K; total out of work force -968K.
A record 95.385M people are out of the work force.

Food and Drink: +89K

Biz Professional +50K

Manufacturing +24K

Retail -8400

Mining -2000

Trump: Asian trip starts today. Will the longest since Bush I threw up on the Japanese PM's lap during dinner. Ah what a classic, Animal House-esque moment. Cannot make that stuff up.

Bonds: 2.345% vs 2.349%

EUR/USD: 1.1656 vs 1.16515

USD/JPY: 113.98 vs 113.845

Oil: 54.71, +0.16

Gold: 1276.70, -1.40

Stocks a bit off the morning highs but set to open upside. It is Friday and last Friday was strong so who knows what will happen. Not the big gap open from last Friday, but steady. Markets are volatile but steady. If we get some entries, it has shown to be a good move.

Jon Johnson, Chief Market Strategist
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Thursday, November 2, 2017

Market Alert - Pre-Market

Futures vs FV: SP -1.61; DJ +15.99; NASDAQ -4.90

Futures flattish with no real selling. Yes, they are not up, but despite hand-wringing by some on the financial stations, this is not a selloff. Seems idiotic to have to say that but that is the market. The key is the BTD faithful and if they use FB's and others' weakness to move in.

Productivity Q3 prelim: 3.0% highest since 2014 vs 1.5% Q2

AN CEO on CNBC noted that elimination of regulation by the current administration is having a big effect on productivity and thus economic growth. Fewer regs eliminate the massive inefficiencies of the prior Administration and allows more profitability, etc.

BOE: Raised rates for the first time in 10 years, +25BP

Earnings beats: BABA; ADB; FB; QCOM; GPRO (weak guidance); SHAK; FEYE; YELP; FIT

Misses: W (TB); APRON (TL); TEVA (TB); AN (TL); TSLA (BL); SYNM (BL); CAKE (TB); HNZ (TL)

Bonds: 2.358% vs 2.358%

EUR/USD: 1.1643 vs 1.1658

Oil: 54.23, -0.07, right at the cusp

Gold: 1277.40, +0.10

Stocks are off the morning lows, off the morning highs, just milling around. Volatility hit Wednesday once more and we will see if RUTX, SP400 settle down. The House tax bill will be released and the early leaks are saying the 20% corporate rate is permanent while the pass-through is a weak applying lower rate to first 30% of revenue. Seriously? Small guys get screwed again.

Jon Johnson, Chief Market Strategist
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Wednesday, November 1, 2017

Market Alert - The Close

The indices tried for greatness Wednesday, continuing the rally from Friday as futures were up and stocks started the session higher, pushing the indices to yet again new highs. It was not to last, at least for most of the indices, as the solid triple digit Dow futures and 20+ NASDAQ futures could not, similar to the Astros in game 6, hold a lead. They sold noon, rallied into the FOMC rather dovish statement, but then faded into the close.

SP500, DJ30 and NASDAQ 100 managed a modestly positive close as the other indices limped in with relatively modest losses.

SP500 4.10, 0.16%
NASDAQ -11.14, -0.17%
DJ30 57.77, 0.25%
SP400 -0.27%
RUTX -0.67%
SOX -0.32%
NASDAQ 100 flat

VOLUME: NYSE -14%, NASDAQ +1%. NYSE trade tumbled back, NASDAQ held above average trade as it spun its wheels.

ADVANCE/DECLINE: NYSE 1.1:1, NASDAQ 1.7:1. Still pathetic breadth, but at least it was upside even as NASDAQ was negative.

DJ30, SP500, NASDAQ, SP400, SOX all punched out new highs while RUTX came within 2 points of a high. Then all backtracked off the highs though they did not all turn negative. Still trending to the upside of course -- the indices could not hold new highs, but it was not a reversal session.

We picked up some JASO on a nice break higher, tried to get some FLEX but it decided to get a volume surge late and we did not get the alert in the office until right at the close so we will be looking at it Thursday morning. Took some gain on CF, should have taken some on CRM but got a bit greedy and it faded on us. Closed the rest of LITE, some of CLVS, and KSU as it would not break lower.

Of course you have to see how the up then down action Wednesday plays out Thursday. Thus far nothing has impaired the upside move though once again the volatility creeps back in. FB earnings were huge, but it sold back afterhours when the CEO talked about how much money it was spending on security for its community. Of course he said that; the company is on 'trial' in the Congress the past three days.

Then futures fell a bit when a report came out that the much anticipated House tax bill -- delayed until Thursday -- will include a 10 year phaseout -- not phase in -- of the corporate tax rate. I cannot make this up. They all ought to resign right now if they think this is 'reform.' It is the same BS President Bush pulled with his 10 year tax cuts that then went right back up. Intelligent people who have no belief in what they are doing and consequently they put forth loads of crap that makes no one happy. What did Cruz say? Graham? Looks as if they are heading out the door.

Have a great evening!

Jon Johnson, Chief Market Strategist
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Market Alert - FOMC Decision

FOMC: Left rates as is. No surprise.


Growth will warrant gradual increases in FFR

Economic activity rising at a solid rate despite recent disruptions

Labor market strengthens

Inflation remains 'soft' below Fed's speed limit.

Biz investment picked up in recent quarters.

Monetary policy still accommodative.

Pretty much as you would expect from an almost 'lame duck' Fed.

SPY pretty much gave up the pre-market gains but is racing back up in response to what is a pretty much expected direction. Frankly nothing that inflation is soft, giving the Fed room to hike gradually if it wants or, it doesn't have to hike if it doesn't want.

SP500 4.83, 0.19%
NASDAQ -17.77, 09.27%
DJ30 42.23, 0.18%
SP400 -0.37%
RUTX -1.09%
SOX -0.90%

Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP +9.19; DJ +138.7K; NASDAQ +26.44

A new month and futures are skying higher as more money moves in to start the new month. They are adding in favor of the trend, and nothing like money to smooth over any volatility. Can SP500, RUTX overcome their volatility with this money and move on? Looks as if they are going to make a go at it.

Comments are that everything moved up Tuesday. We know that is not true by looking at some former leading sectors and others that are struggling a bit. We also know that breadth was paltry for the gains in the growth areas that include RUTX. Watching breadth today to see if that spreads out more.

Taxes: House delays its bill a day. More asinine comments coming out that the corporate tax may be sunset. Seriously? Cuomo in New York was on Fox Business this morning spouting the same old dogma about taxes that you hear every time they are broached. These people truly have no grasp of economics, or if they do, they don't care. They just want to be elected again and again and again. Same for the other side. If they were smart they would have offered a plan that was less susceptible to the same old dogma, the one I suggested over two months ago that would cut off the 'tax cut for the rich!' war cries of the democrats. But, no, I am convinced all in DC suffer chronic stupidity brought on by their distorted view of the world from DC as well as the lust for control.

ADP: 235K vs 215K vs 110K (from 135K). Highest since March with a big rebound in . . . construction post-storms. Duh.

ISM at 10ET, FOMC at 2ET

WMT: offering 3x more items online for holidays.

Earnings beats: EL; CLX; GNRC; AGN (BL); GRMN; CHKP; X

Misses: TRI (TL); DDD (suffering TB, TL and BL); EA (TL)

Auto Sales: Snap back from storm in numbers and prices. F 6.1% but Fiat/Chrysler -13.2%.

Bonds: 2.383% vs 2.378% 10 year. Off a bit pre-Fed.

EUR/USD: 1.1611. Dollar rising pre-Fed as euro falls again

USD/JPY: 114.15. Dollar rising here as well, continuing renewed strength.

Oil: 54.84, +0.46. Closing in on the 54.9 - 55.00 resistance. Funny, the guy on CNBC who swears oil was rolling over a week ago because it had to at 52ish is not even mentioning oil. Nor do the colleagues who would not dare mention it.

Gold: 1276.30, +5.50

Futures have held the gap higher all morning, now just a bit off session highs. It is one of those locked upside since futures started trading mornings as the new money is pushed in. No doubt the market surges, but will it hold? Well, the trend is straight up so you would presume it would. We will see what entries we get.

Jon Johnson, Chief Market Strategist
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