Futures vs FV: SP +15.67; DJ +102.71; NASDAQ +81.72
GOOG earnings and China fiscal stimulus plans have markets around the world higher and the US market obviously set to gap higher. Ad revenue +25% at GOOG is amazing, but China planning stimulus to rescue its rapidly dropping large economy is the most important.
Tariffs: The irony is the President tweets tariffs are 'the Greatest,' and that 'everyone is talking' as a result of them. He has a point: everyone has to talk or face tariffs; they are being used as a stick/carrot to get those who have no interest in changing the trade positioning (i.e. those benefitting from the status quo) to start thinking yes things have to change.
Beats: UTX; MMM (but getting clobbered); VZ; LLY; HOG (warned about tariffs); GOOG
Misses: WHP (tl, bl, the dreaded TB)
Sentiment: Doug Kass liquidates all upside, goes net short, saying downside risk dwarves any upside potential.
Rosenberg: Says a credit bubble exists and will tear into stocks.
Turkey: Kept rates flat instead of hiking as expected. Lira imploding.
Security clearances threatened revocation by White House: why not? Why do people no longer in government, in service, have security clearances? That just leads to trouble.
OTHER MARKETS
Bonds: 2.967 vs 2.962. Bonds lower but slowing after two big plunges pushed yields near 3.0%
EUR/USD: 1.1696 vs 1.1694
USD/JPY: 111.15 vs 111.40
Oil: 67.92, +0.03
Gold: 1225.90, +0.30
A big gap up on the open and we will see if it takes all the indices with it, e.g. RUTX, SP400 that need new breakouts.
Will see what kind of buys there are, but remember, most companies still have to report results this week or next. Or next.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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