Futures vs FV: SP -5.31; DJ -34.73; NASDAQ -12.06
US futures are lower and indeed stocks are lower around the globe ostensibly due to statements from a trio of world leaders.
Trump: The dollar is too damn strong already, said Trump in criticizing the GOP tax plan that includes a Larry Kudlow-hated border tax. Said tax would supposedly increase the dollar's value by 15%. It is very discouraging to see Trump talk of the dollar as too strong. That is old Bush et al dogma that believes you can devalue your way to prosperity. The ONLY thing the average US citizen had going the past several years was a stronger dollar. The dollar was really strong in the 1980's and 1990's and we prospered. People from around the world want to invest in a country with a strong, stable currency. It is quite worrisome Trump takes this kind of attitude that benefits the large corporations, the ONLY winners in the Obama era, over those that make the backbone of the country.
Trump is also talking of a healthcare plan where everyone will get coverage and it will be 'beautiful.' Sure sounds like a single payer system, and having had two family members treated in two different countries with state run programs, 'beautiful' is nowhere remotely close to the appropriate adjective. In fact, to borrow a Clinton word, 'deplorable' is more appropriate.
China: Leader attends Davos (oh boy), spouts globalist pabulum, says a trade war benefits no one (and he left out, particularly China). A bunch of non-words.
UK: PM says that Brexit will be a full exit, but then also says both houses of parliament have to vote on it. Of course that begs the question that after the people were allowed to vote on it why does their legislature have to approve the people's vote? What this means is a less chance of Brexit.
With all of that, the dollar is lower, bonds are higher, gold is higher, oil is higher, stocks are lower.
M&A: NE buying CWEI. Our CWEI positions will scream higher. Can sell some, can keep some for conversion into NE shares that are showing opening a bit higher as well as the market likes it.
BBA buying the rest of Reynolds in tobacco.
Upgrades: NFLX to buy; DIS to buy
Earnings: MS, UNH both beat.
OTHER MARKETS:
Bonds: 2.318% VS 2.393%. Rallying on world leader comments.
EUR/USD: 1.0694 vs 1.0645
USD/JPY: 113.048 vs 114.473. Dollar is struggling post Trump comments re too strong dollar.
Oil: 53.24, +0.87
Gold: 1216.50, +20.30
Futures lower all morning, rallied back into the 8:00ET hour then have faded back some of that recovery. All in all, no wrecking ball to the market, but once again, after moving up near the top of the range stocks stumble ahead of a breakout. All, of course, but NASDAQ that has NFLX and friends to prop it up.
The market has shown buying off of weak opens or weak sessions. We will see if that comes again OR whether the post-election Trump rally is getting old -- with Trump's comments about the dollar, healthcare, etc., making it older.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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