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Tuesday, January 9, 2018

Market Alert - Pre-Market

Futures vs FV: SP +4.74; DJ +57.00; NASDAQ +18.12

Futures are up the second day of the week after a lower start Monday yielded some upside outside of DJ30. Today all are pointing higher as world markets are up and the US is set to start higher. Thus far the US markets have had no issue holding gains if they get them in a session.

Holiday sales: Helping provide some of the upside impetus for the session gains. TGT reports sales that beat expectations and raised its full year as a result. While companies such as URBN reported lower sales, the consensus is sales were much better than expected across the board.

NFIB Small Business Optimism Index: While it fell some in December from a blistering November, the survey takers say they have never seen anything like 2017 in terms of small business optimism. The year set a record high and the NFIB says small business optimism spiked on 11-9-16, the day after the election and has rallied since.

NKOREA: Reaches a deal to send a team to the Olympics, raising the question whether the athletes will pass any health, drug, and radiation tests. NKOREA also agrees to military talks with other powers.

INTC: MSFT has halted some of its patches to fix Intel's vulnerable chips because it is generating blue screens. I wonder when the lawsuits will start about this? You were sold a chip that was supposed to run at a certain speed, but to make it safe to use you have to have a 'fix' that significantly slows the speed. That is a Deceptive Trade Practices Act situation in Texas and other states.

Federal Reserve: Atlanta Fed signals the Fed may be changing its views on rate hikes as Atlanta says there may not be three hikes in 2018. Shocking. They are so wedded to the Phillips Curve they just cannot figure what is happening. At least some are saying they need to rethink things; likely the Austrian or Chicago school economists on the Fed. I think there are one or two, but they are not on the FOMC.

Upgrades: AMZN, PYPL

Bonds: 2.50% vs 2.482%. Milestone level.

EUR/USD: 1.1922 VS 1.1965. Dollar higher today

USD/JPY: 112.61 vs 113.06. Dollar lower today

Oil: 61.96, +0.23

Gold: 1312.70, -7.70

Futures are holding gains though off the highs the past 15 minutes. As noted last night, every session at this juncture has to be viewed to see if there are stocks just testing and resting or rolling over, particularly for SP500, DJ30. At the same time, other stocks in other indices continue to set up good patterns and AMZN is set to open 10 clicks higher after its upgrade.

Jon Johnson, Chief Market Strategist
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