Futures vs FV: SP -3.25; DJ -78.72; NASDAQ -5.33
Futures gapped lower, recovered rather decently to just below flat line, but then started tailing off again an hour back. They have been unable to recover and are heading back near the very early morning low.
Shutdown: Third day, sides seem to be digging in their heels. GOP feels comfortable with its position Dems are shutting down everything for 700K illegal immigrants in the Dems 'Amnesty or Bust' gambit. After the tax reform success, the Dems feel the need to regain momentum elsewhere, and again they are going to play the immigration card as in 2016. Risky gambit. Supposedly a vote is scheduled for this morning or early afternoon -- it is a bouncing ball -- but no one is ready to say 'uncle' just yet.
IMF: Speaking of taxes, and not that the IMF should carry ANY weight, but it says that the US and the world will see more growth thanks to tax reform.
M&A: CELG and JUNO are official. ADM buying BG. AIG buying Validus.
Upgrades: DNKN; HOG; LOW
Downgrades: AALP (slowing iPhone sales fears -- again); GE; AXP
OTHER MARKETS
Bonds: 2.644% vs 2.661% 10 year
EUR/USD: 1.225 vs 1.222
USD/JPY: 110.72 vs 110.76
Oil: 63.32, -0.05. Still consolidating, holding the gains.
Gold: 1333.00, -0.20
After a strong end to the week for a second straight week (two strong Friday sessions), there is some softness to start the new week. Last week stocks gapped upside to start the week and were then rocked and sold back hard. Taking a different tack this week with the sellers leading off.
A soft start in an uptrend is not bad: lets the bids reset and come back in. We will see if that holds. As noted in the weekend report, there are still many good stocks showing quality patterns in the market, and if money continues to move in, they will likely make the moves we are looking for.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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