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Thursday, June 7, 2018

Market Alert - Pre-Market

Futures vs FV: SP +2.95; DJ +57.61; NASDAQ -2.83

Trade: China/US strike a deal on ZTE, showing they are, golly, still talking and making deals. We are told that everyone in the world is rebelling against the US and its tough stance on ending the absurd, skewed trade relations. They speak rebel, but they don't do rebel. Even an EU official said WED they nave to go along because it will hurt them more not to. Imagine that, having an equal trading relationship is good for both sides. Who would have thought?

G-7: Trump supposedly to get the 'cold shoulder' from the G-6. What is new, right? Marcon says he will 'stand up' to Trump. Good for him. Get your PR. Then you will have to go along. Arguing why fully developed nations should not have equal trade relations is a losing argument.

Buffett/Dimon: Railing against quarterly guidance with the basic argument being it makes their jobs hard. Dimon said weather could impact results, a company should be able to build something that detracts from earnings near term without facing stock price repercussions.

Why is that an issue? Because their compensation is TIED to stock performance. As usual, the ones in power want less information out so they can be less accountable. Listen to Buffett's excuse for CEO's: if they had to make numbers but may not do so, they would do 'something stupid' -- i.e. lie about the numbers. Do you hear what they are saying? CEO's might make the choice to lie and commit fraud because of quarterly guidance. Sorry, lying in this situation is a choice and it is punishable. Absurd logic, absurd rationale.

Dimon said that investors were intelligent. Yes they are. Thus they know if the weather played a role, etc. News ALWAYS causes prices to swing short term, but long term all the data is factored in. CEO's get paid tens to hundreds of millions of dollars. Providing quarterly guidance for PUBLICLY TRADED COMPANIES is part of the reason for that compensation. These geniuses are simply acting as the upper echelon they are: they are above it all and should not be held accountable. No, they are the heads of publicly traded companies, are paid absurdly large salaries for doing so, and they should earn that money, not be shielded from providing the investing public full information. Otherwise, take a lower salary (THAT was not mentioned) or go private.

But, I digress.

Bonds: 2.985% vs 2.974%

EUR/USD: 1.1836 vs 1.1774. Euro continues its rebound through the 20 day MA back toward the 50 day MA.

USD/JPY: 109.94 vs 110.15

Oil: 65.35, +0.62

Gold: 1305.80, +4.40

Futures trading in a range all morning, moving up toward the top of the range as the bell nears. WED stocks gapped higher and after a test, rallied well. NASDAQ may be a bit extended, and the futures suggest that as NASDAQ shares are lower while SP500, DJ30 work to extend their gains they began WED.

Jon Johnson, Chief Market Strategist
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