Futures vs FV: SP +8.81; DJ +80.68; NASDAQ +28.35
The Tuesday rebound gains legs as futures stated higher early on and have steadily trended higher into the open. That is the good type of futures action as it shows active, continuing bids.
Tax Reform: Details are supposed to be released today with 3 brackets (12, 25, 35) with corporate at 20%, pass through (small businesses) at 25%. Once again the small businesses get the short end of the stick while getting beat with the long end of the stick. No healthcare reform and now the slap in the face. Clearly the government does not believe small businesses are important.
Durable Goods Orders, Aug: 1.7% vs 0.7% exp vs -6.8% prior
Ex-Trans: 0.2 vs 08 prior (from 0.5%). Aircraft +44.8%, obviously boosting the overall number.
Business investment: 0.9% vs 0.3% exp vs 0.8% July. Not bad.
Elections: Moore beats Strange n the AL GOP primary. Populists win, has implications for GOP as many of the establishment senators and House reps are expected to see the handwriting on the wall that they will be challenged in primaries and beaten.
Tariffs: US slaps 220% tariff on Bombardier jets from Canada.
AAPL: WSJ reports another snag in the iPhone X production
Earnings beats: NKE (but slowing sales); MU; CTAS
OTHER MAKRKETS
BONDS: 2.310% vs 2.236 10 YEAR. Bonds selling on better Durables, realization Fed is tightening.
EUR/USD: 1.1735 vs 1.17582. Dollar a bit stronger again after the big day Tuesday.
USD/JPY: 113.17 vs 112.22. Dollar continues strength vs yen
Oil: 51.93, +0.05
Gold: 1286.70, -15.00. Gold selling off again, also on the realization the Fed is tightening. A good upside pattern is breaking down.
Futures continue to accelerate into the open. Watching for how the big techs, FAANG recover, but still think they are a relief move. Financials and others are where the money appears to be going. Hence the C play.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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