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Thursday, January 11, 2018

Market Alert - Pre-Market

Futures vs FV: SP +6.37; DJ +40.87; NASDAQ +14.09

The biggest story is a counter to the Wednesday China story. China says the story that it was planning to slow or halt US treasury purchases was 'fake news.' Or was it a trial balloon to gauge market reaction and confirm to China it is the US' banker? If so, it was a success . . . for China. As Rick Santelli put it, China cannot even be honest with the world regarding its GDP, so why would anyone believe it would be honest about its plans for finance even if it was the Chinese government as the source? Points taken on all the above.

WMT: Increasing minimum wage to $11/hour, issuing bonuses for longer term employees up to $4K.

PPI: -0.1 vs 0.2 vs +0.4%. First decline since 8/2016

Core: -0.1 vs 0.2 vs 0.3 prior

Final Demand: 2.6% year/year vs 3.0 exp vs 3.1 prior

Core year/year: 2.3% vs 2.4% prior

Trump: Hints at internet tax, aimed at Amazon? But what about everyone else that is NOT Amazon? Will they suffer to 'punish' Amazon? Give me a break. How is that good for America?

Earnings beats: DAL; KBH; PRGS

Upgrades: CVX

Bonds: 2.568 vs 2.559% 10 year. Bonds down a bit more even on China debunking Wednesday treasury story

EUR/USD: 1.2015 vs 1.1949. Euro stronger on a more hawkish BOE

USD/JPY: 111.51 vs 111.37

Oil: 63.82, +0.25. Up again.

Gold: 1321.90, +2.60

Okay, futures are up today on a 'retraction' of the story Wednesday re China stopping treasury purchases. Not a roaring open, but recovering the rest of what was lost and up a bit, trying to look at new highs.

That is good for the upside, but we will watch and see how FAANG reacts as well as other leaders. Do they shake it off? They were due a test anyway after the last run.

Still good stocks in good position that are ready to try to make their moves and we are watching those as new entry possibilities.

Jon Johnson, Chief Market Strategist
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