Market Alert - Pre-Market

Futures vs FV: SP +15.03; DJ +220.91; NASDAQ +50.50

Stocks futures gapped higher at the open and have held the range the entire morning. Catalyst: US/China trade status.

The US/China 'trade war' has been "put on hold" according to Treasury Secretary Mnuchin . . . as they "work toward an agreement." That last segment is what many appear to be overlooking.

No real specifics other than China is going to "substantially reduce" the trade deficit and buy "massive amounts" of US agricultural products (not specified if that is equipment, food, both, etc.).

Nothing said regarding IP theft though you know this was covered and is likely part of the "work toward an agreement" part. The way this negotiation has gone it would appear that makes sense as the 'wins' come out in dribbles.

CNBC pans the 'deal' saying nothing has changed but that is a western view. This is a different negotiation melding the new Trump western form with the Chinese 'can't lose face' form.

In any event, the agreement work to come is the potential fly in the ointment. Will the 'deal' stick as negotiations on other areas progress? EXPECT to see the same ups and downs re trade as seen the past two months. That is not great for stocks as they could open down one day as much as the open higher today. That is, however, the way this is going to get worked out.


M&A: FTBT buying MB Financial. Blackstone buying LaSalle Hotel Group, continuing Blackstone's expansion in that area.


Venezuela elections show a person with 75% disapproval winning. Hmmm. US threatens sanctions. What is new?


Dollar: Continues its surge.


OTHER MARKETS
Bonds: 3.074% vs 3.06%

EUR/USD: 1.177 vs 1.1775

USD/JPY: 111.22 vs 110.74. Dollar crushing the yen again after breaking through the 200 day MA last week.

Oil: 71.39, +0.11

Gold: 1268.50, -4.80


Futures are locked in at the same gains for hours. Okay, stocks will jump early. Staying power is the key along with whether we can get some decent entries today.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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