Market Alert - Pre-Market

Futures vs FV: SP +5.19; DJ +48.89; NASDAQ +21.51

Futures trade near pre-market highs after starting the early morning with a sharp decline. It looked as if Tuesday was a one-day respite that released selling pressure and was again set for a fall. Perhaps the White House was watching as Treasury Secretary Steve Mnuchin appeared on CNBC (and Kudlow will be on Fox Business soon) to discuss the proposals re China and others on trade. They were not as draconian as big tariffs Trump had threatened.

The proposals include a beefing up of the existing laws for investment here and abroad by foreign or US companies. Now there will be review of any deal going either way if it involves some transfer of US company tech. Also, the US can block joint ventures if a buyout or merger is ruled against if it would involve tech transfer from the US. Those are sensible pressure points though not nearly as harsh as the tariffs proposed. Part of the good cop/bad cop that Trump often plays, with Trump often being both the good cop and the bad cop. Now he let Mnuchin play good cop, as most would expect Mnuchin to be given his background.


Futures rallied on this news and are thus far holding decent gains. Much better of course than what they were showing before. Ah, but will they hold? Depends upon how the market views this 'all clear.'


Durable Goods Orders, May: -0.6 vs -1.0 exp vs -1.0 April (from -1.7).

Better than expected, but first 2-month negative print since mid-2016.

Ex-Trans: -0.2 vs 0.4 exp vs 1.9 prior (from 0.9 April)

Cap-Ex: -0.2%. Not great, falling to negative from positive.

These are preliminary numbers, and Mnuchin said he expects a 'good GDP' number. So all must be well, right?


M&A: CAG wants to buy PF (Pinnacle Foods)


Saw Larry Summers on CNBC criticizing the trade negotiations and poking fun at Wilbur Ross. Summers is a carerr politician and 'educator.' Ross is a career business man and billionaire. Theory versus reality. Who would you want to lead your business deal or help you negotiate? Reminds me of my old joke in theory or reality.




OTHER MARKETS
Bonds: 2.851% vs 2.877% 10 year. Bonds continue receiving a bid

EUR/USD: 1.1599 vs 1.16517

USD/JPY: 110.27 vs 110.097

Oil: 71.28, +0.75. Oil continues welling up toward the year's high

Gold: 1257.56, -2.30. Gold continues its slide lower


Well, we will see how the moves hold, will see if the market believes all is going back toward working on a real resolution versus devolving further into a deeper trade war.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

Alert Key
http://www.investmenthouse.com/alertkey.htm

PLEASE DO NOT REPLY TO THIS EMAIL. USE THE CONTACT US PAGE ON OUR WEBSITE.

Customer Support: http://investmenthouse.com/contact_us.php