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Monday, May 14, 2018

Market Alert - Pre-Market

Futures vs FV: SP +7.08; DJ +79.83; NASDAQ +17.69

Stock futures are higher again for another session though quite the modest bounce to start the week. The good thing is it shows the upside bias in a lack of news -- a dearth today for sure. The same question arises, right? Will this upside open hold.

There is not much news.

China: Trade wars are seen as less likely this morning as Trump tweeted that he and XI were working to get ZTE, a huge Chinese phone company in trouble, back in business as fast as possible. That implies a warming of tariff wars, but it also suggests that perhaps China is starting to work with the US in getting out the bad people in the company that were assisting Iran and start acting more responsibly. Perhaps.

Chips: Also a China story. China is reopening the consideration of QCOM's acquisition of NXPI. Quid pro quo with the ZTE actions? Of course.

Other than that there are some upgrades, some downgrades, the US is opening its embassy in Jerusalem to large protests/rioting.

ECB: Governor Villeroy spooked markets saying the end of asset purchases was near (September or December). Euro is marginally higher. Didn't hit the markets THAT hard.

Bonds: 2.984% vs 2.97% 10 year. Still hanging out just below 3%

EUR/USD: 1.1984 vs 1.1941

USD/JPY: 109.49 vs 109.384

Oil: 70.83, +0.13

Gold 1318.50, -2.20

Futures are hanging in the same range all morning as the upward bias boosts stocks modestly in the absence of any major news. It may be the early upside move fades as the recent leaders test their solid breaks higher. Some were already testing late last week, and a bit of pause to start this week could have those leaders heading back higher to lead the next leg. May take a day or two to get there, but while they take a pause we are watching to see if other areas pick up the move as our weekend plays show.

Jon Johnson, Chief Market Strategist
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