Futures vs FV: SP =16.93; DJ -129.72; NASDAQ -26.55
World markets are lower as there is no re-emergence of the healthcare reform bill after a weekend of more talks, blame-shifting, etc. With no movement on healthcare, tax reform is viewed with a skeptical eye: how to make up the differences in revenues without the benefits of the healthcare reform and the reduced costs it creates? The President says he will work with democrats on this, but just what will they want to cut? Hmmm, no wonder world markets are lower in anticipation of less US growth than anticipated.
Dollar: Four month low. A big loser in this as it is down hard. Interestingly, oil is down as well even though it is priced in dollars. Views of weaker than expected economic output can in the near term overwhelm currency issues.
Government: Trump creating a new office to help overhaul and streamline government. Heading it up is his nephew who was so effective in using online research and information in propelling Trump to victory. Interesting.
DD/DOW merger approved by EU.
Earnings: Just misses today. CAVM (TL, BL); GIII (TL, BL)
OTHER MARKETS
Bonds: 2.357% vs 2.40% 10 year. Bonds rallying as equities markets struggle.
EUR/USD: 1.0895 VS 1.0798. Dollar down.
USD/JPY: 110.169 vs 111.335. Down here as well.
Oil: 47.37, -0.60
Gold: 1262.80, +11.10
Futures tried to move off the session lows, but peaked a couple of hours back and have slid back to the lows of the morning range. It is a range, not a 45 degree angle down. At least there is no dive into the open that is ongoing, but there is also no morning relief attempt, and that keeps the foot on stocks into the open.
Will see if any bids return, but the afterhours hope from Friday is nowhere present this morning as investors view the future as not so bright right now and will need some time and some better news to get over it.
We will see how the leading groups such as biotechs and chips can hold support. Also looking to see if we can get any decent entries on the downside plays.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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