Market Alert - Pre-Market

Futures vs FV: SP +6.23; DJ +70.22; NASDAQ +16.53

Whatever bothered futures after the Monday close dissipated as futures opened modestly higher and have rallied since. Indeed, they really got in gear about a half hour back as Senator Corkscrew decided he needed to affect some damage control after his Monday statements. He twisted onto the CNBC cameras and talked of a 'backstop' that would raise rates if the revenues did not increase enough under the tax cuts. This is going to be the most convoluted bill since the ACA, but this one, if it has business tax cuts and incentives, will at least have a positive net effect. In any event, the Senate Budget Committee votes on the bill today to get it out of committee, the first step.


Cyber Monday: Biggest in history (of course) at $6.6B in US sales.


Housing prices: Fastest rise since 7/2014 at 6.2% on Case/Shiller.


M&A: Owner of Arby's ups its bid for BWLD to $157/share. That is what we were playing for: the inevitable upping of the ante. Now we can cash in as the bid at 157 was a bit below our projected bid of 160ish. Still works well.


WFC: More fraud, this with the fx transactions for clients. I am shocked, shocked that there is fraud going on at WFC.


Wholesale Inventories, Oct: -0.4% vs 0.4% exp vs 0.1% prior (from 0.3%). Half full or half empty? Some are styling this as a collapse. I believe it is a situation where the supply was caught short by unanticipated demand.


Bitcoin: Novogratz says it could be at 40K by end of 2018, with a possible 50% crash in between.

Bitcoin: Musk denies he created the cryptocurrency. Of course he didn't. It was Al Gore.


Fed: Powell confirmation hearings today. He was approved before, he is a Yellen clone, he should sale through.


OTHER MARKETS
Bonds: 2.321% vs 2.331%. Curve flattens a bit more.

EUR/USD: 1.1897. Euro holding its gains.

USD/JPY: 111.21. Dollar bounces from the 110 handle.

OIl: 57.75, -0.36

Gold: 1295.30, +0.90


Key to us today is how the chip stocks react to the Monday selling in part on the MS downgrade. There is volatility the past two weeks in some important chip names, however, and the downgrade came after the fact. How they perform today is important.

Also important is the action in small and midcaps. They tested good moves. Are they ready yet?

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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