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Monday, April 16, 2018

Market Alert - Pre-Market

Futures vs FV: SP +20.95; DJ +189.89; NASDAQ +54.41

Futures gapped higher early morning and rose steadily to 6:00ET. Since it has been a lateral move with an upside kicker the last half hour as the bell approaches.

The catalyst appears to be that 'mission accomplished' comment from The President. Putin threatens 'chaos' if there is another strike on Syria, but again that tweet suggests there are none contemplated. Instead, the US is putting n new sanctions against Russia today. With an economy roughly the size of Texas, while not tiny, Russia just does not have economic clout. These sanctions hurt it, and going after the oligarchs, Putin's friends and henchmen, was dramatic.

Retail Sales, March: 0.6 vs 0.4 exp vs -0.1 Feb

Ex-auto: 0.2 as expected and matching FEB

Furniture +0.7, Autos 2.0%, Apparel -0.8

Overall a decent number after 3 months of down.

Empire PMI, April: 15.8 vs 19.1 exp vs 22.5 March. Yes, a slow patch.

China: News is quiet this morning. Trump issued a tweet stating China and Russia are manipulating their currencies. Of course the establishment economists, etc. say untrue. But if you look at the yuan's movement since the US proposed those tariffs and that is exactly what is going on.

Alternate realities: Scanning the news, the latest President approval ratings are out. CNBC reports approval is declining. Others report approval is the highest since the first 100 days and has moved up the past quarter to levels higher than the predecessor. The point: read the actual numbers, not the headlines (like the stock-trading algos).

Bonds: 2.856% vs 2.825%. Yields jumping back up as bond bounce may be over.

EUR/USD: 1.2373 vs 1.2329

USD/JPY: 107.27 vs 107.33

Oil: 66.65, -0.74

Gold: 1347.80, -0.10

Futures are holding solid gains into the close. Will have to see if this move holds, but as suspected Friday with that low volume decline, it was an event-worry weekend that caused that dip. The earnings rally is set to continue to start the week.

Jon Johnson, Chief Market Strategist
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