Futures vs FV: SP -3.91; DJ -48.8; NASDAQ +1.62
Flat start to 2017's second week as markets assess the next phase of the Trump presidency, the part where hope of growth policies has to translate into policies. The next look at those policies will be Wednesday when Trump holds a press conference. Wonder if Meryl Streep will be there?
Not a lot of economic data, just company moves and brokerage calls on stocks.
GS: Downgrades PG, KO to sell on an economic growth outlook versus the last 8 years. Seems to be some anecdotal evidence that Wall Street also believed the economic activity during this administration was not that full of growth if, after all the claims of growth, GS is saying sell the stocks that you own when in a slow growth period.
M&A: Mars buying WOOF. Takeda buying ARIA.
Fed: Rosengren says "gradual but somewhat more regular increases" in rates is called for.
Italy: Unemployment highest since June 2015 as youth unemployment hits 39.4%. Why is this important? Because Italy is seen as one of the next economic hot issues for the EU. Overall EU unemployment held at 9.8%, what the US unemployment rate actually is, not 4.7% reported.
OTHER MARKETS
Bonds: 2.379% vs 2.42%
EUR/USD: 1.0538 vs 1.0532
USD/JPY: 116.433 vs 116.98
Oil: 52.70, -1.29
Gold: 1181.00, +7.60
Futures are off the morning highs as the bell approaches, but futures have not provided a good indication of direction here in 2017.
Still many stocks and sectors in good position to rally another leg after pullbacks to end 2016. We will see if the bids appear, but when we buy we know that the sentiment is over 60% and so another rally should be viewed as a singular event unless it shows otherwise.
Letting positions work as long as they will but as we were doing last week, if they show signs of faltering and breaking support/trend, we want to protect. We can always get back in.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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