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Wednesday, December 27, 2017

Market Alert - Pre-Market

Futures vs FV: SP +6.18; DJ +29.79; NASDAQ +12.34

In a very light news morning, futures are up all pre-market, hitting higher highs 20 minutes back then backing off some. Stocks are set for a decent higher open after a week of lateral movement. Will this break them higher? Could be, but if it does what does it mean? Well, this is the in-between time before the new year gears up and things can change. Thus you take it for what it is and take what it gives you and not expect much more.

Sales: The season is reported as the biggest sales season ever in terms of dollars spent. I guess Drudge would headline 'boom.' Whether it is really the biggest ever, not likely: inflation eating away the dollar over the decades belies the reported number. We are working on an inflation adjusted number, but no doubt this was the best holiday season in over a decade.

Tax impacts: Barclays, BMW, Shell are taking charges this year while they are more valuable than what they will be next year. DAL reports the tax reform will add $1.25/share to its bottom line. Chubb says it will receive a 1-time $250M benefit. Others are joining in on the bonuses and wage increases, e.g. Sinclair Broadcasting.

AAPL: More 'you slowed me down when nothing was wrong forcing me to buy a new phone because you didn't tell me' lawsuits.

North Korea: China reportedly illegally selling oil to NKorea. US satellites caught the action on film. Smile, you're on candid satellite!

Other Markets
Bonds: 2.454% vs 2.474% 10 year. Bonds continue to rally back -- some

EUR/USD: 1.1901 vs 1.1857. Euro was set to bounce again and it is doing so

USD/JPY: 113.19 vs 113.20.

Oil: 59.41, -0.51. Giving back a third of the strong Tuesday breakout.

Gold: 1286.90, +1.40

Futures are wobbling a bit into the open. Perhaps the upside won't find continuing bids. Maybe. There are a lot of good stocks in position to move, and we added some last night. Okay, RIOT is a bald-faced momentum stock in a decent pattern. But there are really good stocks in position, and even if the market overall does not rally we want to take what they are giving if they are going to give it.

Jon Johnson, Chief Market Strategist
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