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Friday, July 6, 2018

Market Alert - Pre-Market

Futures vs FV: SP +0.29; DJ -31.74; NASDAQ +12.20

The doom/negative websites said to watch out for a jobs miss. The overly bullish said expect huge. It was neither. It was not bad. It was more of the same, i.e. an improving, decent jobs market but not producing wage growth.

Non-farm: 213K vs 195K exp vs 244K prior (from 223K)

Unemployment: 4.0% vs 3.8% ex vs 3.8% prior. Rose as more people entered the workforce looking for jobs. This is, finally, a more normal reaction. Amazing isn't it how all through the past 'recovery' nothing acted normal yet everyone said it was a recovery. It wasn't. Now that we are having a recovery you see the numbers reaction as they always do.

Wages: 0.2% vs 0.3% exp vs 0.3% prior. 2.7% year/year

Workweek: 34.5 vs 34.5 exp vs 34.5 prior

U6: 7.8%

Participation rate: 62.9% vs 62.7%. More people coming back into the labor force, trying to weed down that 95.9M people out of the workforce and get them into productive roles once again versus reading the want ads, bed rest, and the other absurd things that allowed them to collect unemployment or disability or some other 'aid.'

Manufacturing +36K
Professional/Business: +50K
Healthcare: 25K
Construction 13K
Mining 5K
Retail -22K

Trade: US/China exchange $34B in trade tariffs.

Trade Deficit: Over past 3 months down the most in 10 years. Current read is the lowest since 10/2016. Seems to be going the way the President wants it.

Continue hearing out feckless elected officials in Congress cry about the tactics used against our allies and non-allies regarding trade. They want a kinder, gentler approach. We have HAD a kinder, gentler approach for decades and they have pantsed us. They don't care; they have a good deal. So, do you continue to do what does not work or do you finally demand they change and if not reap some of the pain we have to endure? Our congressional leaders are, as stated, feckless imbeciles.

BIIB: A breakthrough on Alzheimer's. We can only pray this is true.

Bonds: 2.818% versus 2.835%. Bonds rallying on this jobs report? On a Fed to stay the course in hiking?

EUR/USD: 1.1746 vs 1.1689

USD/JPY: 110.54 vs 110.66

Oil: 72.28, -0.62

Gold: 1257.20, -1.60

Futures were -6 NASDAQ, -75 DJ pre-jobs report. They spiked to NASDAQ 29.95, DJ 44.26 post-report. They have settled back to mediocrity as the bell approaches -- trade war, remember?

Friday on a shortened week. We will see what bids hold, what bids emerge -- if any. Thursday saw some drugs/biotech/healthcare areas show some life, a bit defensive but also a growth area. Leadership could emerge from there (one reason small caps were solid). Nonetheless, have to see the NASDAQ large caps also step up again.

Jon Johnson, Chief Market Strategist

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