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Tuesday, April 10, 2018

Market Alert - Pre-Market

Futures vs FV: SP +35.04; DJ +363.90; NASDAQ +106.16

Round two. Futures are set to gap higher, though larger than Monday. The market views China as acquiescing some to US trade demands as Xi says he will lower tariffs on autos and 'open China to the world.' Much rejoicing. Yea.

At the same time, in another headline overlooked, Chinese/US trade talks broke down as the US rejects China's offer to cut the trade deficit in half, saying negotiations in this environment are 'even more impossible.' The US wants the theft of trade secrets to stop. Nearly all of China's military advancement is through stolen plans, and US products protected with world patents are routinely stolen, manufactured in China, and sold back to US markets. That from an upstanding member of the WTO. Give me a break. Oh, we did that for decades with China and now when we say 'enough,' they protest and indefensible position from that $12T 'emerging economy.' Again, give me a break.

PPI, March: 0.3 vs 0.1 expected

Core: 0.3 vs 0.2% exp. 2.7% year/year.

Ex-food, energy & traded: 0.4%, 2.9% year/year

Hottest headline in seven years. Will it bleed over into the CPI released Wednesday? That is not worrying investors today.

ECB: Nowotny suggests a 20BP hike in rates. Euro is up.

Oil: Saudi Arabia has 'ambitions' of $80/bbl oil. Oil up +1.

MCD: Expanding to Scandinavia with 200 stores planned.

Mueller replaced? Yes! Volkswagen's Mueller, that is.

Zuckerberg: ZB appears before Congress. Couldn't happen to a . . .

Bonds: 2.805% vs 2.805%

EUR/USD: 1.2346 vs 1.2311

USD/JPY: 107.10 vs 107.15

Oil: 64.43, +1.01

Gold: 1340.00, -0.10

Futures gapped higher, holding in a tight range all morning. Perhaps this is what they wanted to do Monday but the day's political issues got in the way, e.g. Trump lawyer subpoena, etc.

As it stands a gap higher that likely kicks off the pre-earnings run. We will use it to get into positions as best we can.

Jon Johnson, Chief Market Strategist
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