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Thursday, December 21, 2017

Market Alert - Pre-Market

Futures vs FV: SP +7.6; DJ +66.35; NASDAQ +6.02

Futures on a rise all morning and hitting markedly new morning highs after the economic data. Stocks look to try and reverse the 2 days of modest losses though the early gains are not that strong, and the past two days saw moves higher that then faded.

Q3 GDP, Final: 3.2% vs 3.3% 2nd read. Still the highest since Q1 2015

Consumption: 2.2% vs 2.3% 2nd read

Prices: 2.1% as expected

Core PCE: 1.3% vs 1.4% prior read

Philly Fed, Dec: 26.2 vs 21.0 exp vs 22.7 prior. Nice beat.

Earnings beats: ACN; CAG; BBBY

Pay increases: Companies announcing wage hikes and bonuses grow. WFC, BA, T, CMCSA, FITB.

Government: No time to bask in the glow of the tax reform for GOP as now have to pass another stopgap bill to keep the government going. Dems want to shut down the government to distract from taxes and the true story coming out, i.e. that there are some serious tax reductions for much of the US citizenry.

NKorea: Another solider defects, simply walking across the neutral zone as shots are fired at him. Are the NKorean soldiers that bad of shots? Is the regime starting to crumble a la the Soviet block? When the latter started to fold these kind of incidents became more commonplace as the defectors started to believe they could get away with it. Interesting. Could the NK regime die as did the USSR, i.e. just be so economically bankrupt that it just stops functioning? Is that why the leaders are so feverishly working on bombs in an attempt to try to extort some kind of deal with the west before things collapse? Or go out in a blaze of 'glory?' Again, interesting. Almost fascinating. And . . . you heard it here first.

Bonds: 2.488% vs 2.501%. 10 year rebounding some after a bomb below the 200 day MA.

EUR/USD: 1.186. Dollar rebounds some after the big euro move WED

USD/JPY: 113.41. Dollar continues its climb against yen

Oil; 57.79, -0.30

Gold: 1269.70, +0.10

Futures continue to run higher toward the open, but it is still a modest start. Better to see the low to high movement, however, starting modest, perhaps growing toward . . . DJ30 25K. GOOG, AMZN, FB, AAPL all problematic in their pre-market indications, i.e. basically flat. As the new plays last night show, however, they are not necessarily where the money is flowing right now. So, watching the internet, biotech, oil, and even China stocks as they are all showing some money flow.

Jon Johnson, Chief Market Strategist
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