Futures vs FV: SP -2.2; DJ -8.44; NASDAQ -0.25
Another session of a sluggish start, similar to Monday, as investors and traders await tonight's Trump address to Congress. More money for the military, cuts in other programs, health and tax policies. I heard former Congressman Baucus on one of the financial stations this morning saying that Americans wanted health insurance. Has he not learned yet that having health insurance means nothing if premiums are so high consumers cannot pay them and then pay the high deductibles? Insurance does not equal health care any more than having a parking sticker at a university does not mean you will get to park.
GDP Q4, 2nd: 1.9% versus 2.0% exp vs 1.9% first read.
No improvement. Shocking, right?
Trade Deficit, January: $62.9B, the second largest since 8/2008 (9/2015 topped it). That will weigh on Q1 GDP results.
FOMC: Kaplan says it is time to soon start hiking rates. Wow, what a forceful statement. Reminds me of the old 'it is probably a good time to maybe start looking at possibly acting.'
Jobs: WEN is installing self-ordering kiosks in 1,000 (16%) of its stores. How is that minimum wage, that 'livable' wage starting to work out? It is the Robot Employment Act of the 21st century.
Earnings beats: PCLN; NTRI; VRX
Misses: TGT (TL, BL); AZO (TL, BL); THC (BL); HTZ (BL)
Debt: 50% of college students believe the feds will forgive their loans. Isn't there a term for that?
OTHER MARKETS
Bonds: 2.360% vs 2.367% 10 year
EUR/USD: 1.0548, flattish
USD/JPH: 112.153, also flattish
Oil: 53.51, -0.54. Still cannot get over the 54-55 level
Gold: 1257.60, -1.20
Futures remain mired near the bottom of the morning range, but again, not that far down. Modest selling, no sellers, then the still remaining upward bias takes hold, some bids enter, stocks at least hold near flat line.
That is likely the story for the session given the anticipation of the Trump address. Wednesday is the more important session, ostensibly, given there will be more 'knowns' (or as they are called today, promises) for the market to act upon. With the indices putting in new highs though slowly, will Trump try to goose the market and will he be successful? Yes to the first, who knows to the second. For now, despite all the fighting, the market still appears to want to believe.
Watching how SSYS, EXAS open today after starting to move higher Monday, watching how the semiconductors act to see if they can improve.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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