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31Jan2018 Pre-Market Commentary: Wall Street Looking To Stabilize After DOW Sheds 540 Points In 2 Days, Boeing Shares Jump 5 Percent, DOW Futures Up Triple Digits

Written by Gary

US stock market index futures are moderately higher (SPY +0.4%), DOW set to surge at the open snapping a two-day losing streak. Private payrolls jump by 234K, blowing past expectations.


Here is the current market situation from CNN Money

European markets are mixed today. The CAC 40 is up 0.37% while the DAX gains 0.21%. The FTSE 100 is off 0.11%.

What Is Moving the Markets

Here are the headlines moving the markets.

Japan's Fujifilm to take over Xerox in $6.1 billion deal, create joint venture

(Reuters) - Japan's Fujifilm Holdings is set to take over Xerox Corp in a $6.1 billion deal, combining the U.S. company into their existing joint venture to gain scale and cut costs amid declining demand for office printing.

Boeing aims to lift jetliner output nearly 7 percent in 2018

(Reuters) - Boeing Co said on Wednesday it expects to deliver between 810 and 815 commercial aircraft in 2018, as much as 6.8 percent more than the industry-record 763 jets it delivered in 2017.

Futures rise after two straight day of steep losses

(Reuters) - U.S. stock index futures rose on Wednesday, after two days of steep losses, boosted by a controversy-free State of Union speech by President Donald Trump, with investors turning their focus back to quarterly earnings and monetary policy.

Trump vows to protect U.S. intellectual property, without directly blaming China

WASHINGTON (Reuters) - U.S. President Donald Trump vowed on Tuesday to protect American intellectual property, but made little mention of China, which his administration has accused of trade abuses, in his first State of the Union speech to Congress.

Fed expected to keep interest rates steady as Yellen era ends

WASHINGTON (Reuters) - The Federal Reserve is expected to leave interest rates unchanged on Wednesday while signaling a gradual tightening of monetary policy later this year as the U.S. economy continues to expand and job gains remain solid.

Market services business boosts Nasdaq's quarterly profit

(Reuters) - Exchange operator Nasdaq Inc posted a fourth-quarter profit, helped by higher revenue at its market services and non-trading related businesses.

South Korea says no plans to ban cryptocurrency exchanges, uncovers $600 million illegal trades

SEOUL (Reuters) - South Korea's finance minister said the government has no plans to shut down cryptocurrency trading, welcome news for investors worried that authorities might go as far as China's tough action in blocking virtual coin platforms.

Silver (haired) lining? Alibaba lures older shoppers as market slows

BEIJING (Reuters) - Online shopping may not be the typical domain of the elderly, but when it comes to buying groceries with a smartphone, Xiang Jiang, 70, considers herself rather savvy.

Daimler suspends employee linked to emissions research group

MUNICH (Reuters) - German carmaker Daimler said it had suspended an employee and hired an external law firm to investigate the activities of a controversial research group which funded experiments that forced monkeys to inhale toxic emissions.

DOJ Gives Mueller Documents On Sessions' Near-Resignation

Two weeks after Attorney General Jeff Sessions sat for an interview with Special Counsel Robert Mueller, ABC News reported that Sessions' office turned over a cache of internal correspondence, including documents related to Sessions' proposed resignation and emails about the firing of National Security Adviser Michael Flynn.

The report is the latest sign that Mueller's investigation has pivoted away from financial improprieties and actual links between Trump campaign officials and the Russian government and is now focusing on whether Trump is guilty of obstruction of justice for the firing of former FBI Director James Comey. Before the firing, Trump reportedly asked Sessions and Steve Bannon to leave the room before reportedly asking Comey to go easy on Flynn.

According to ABC, details of what the Justice Department provided to Mueller reflect how widely investigators are casting their net.

Citing sources familiar with the matter, ABC News reported in November that Mueller's office was interested in obtaining internal emails related to the firing of FBI Director James Comey and the earlier decision of Sessions to recuse himself from the entire matter, but at the time it was unclear what other type of information Mueller's office might have been seeking.

In an Oval Office meeting following Mueller's appointment, Trump reportedly told Sessions that he should resign, prompting the attorney general to submit a letter of resignation that was ultimately rejected when advisers warned Trump against it. One month later, Trump demanded that White House aides fire Mueller, but he backed off after White House counsel Don McGahn and others made cl ...

ADP Shows Big Job Gains In January In "Excruciatingly Tight Labor Market"

Having dramatically beaten expectations last month (and printed way ahead of NFP), ADP has done it again in January, printing a 234k job gain in January (185k exp). The bulk of the gains were in Services (+212k vs +22k in Goods which are seeing slower growth).

Notably growth in the manufacturing job additions is slowing...

As a reminder, ADP saw 250k jobs added in Dec versus just 148k for Non-Farm Payrolls.

Since Trump's election, ADP's print has been systemically higher than the BLS' data? Makes one wonder if Zandi's firm is helping The Fed with excuses to tighten?

Only inflation jobs sector declined...

Mark Zandi proclaimed on CNBC that this to be an "excruciatingly tight labor market."

"The job market juggernaut marches on. Given the strong January job gain, 2018 is on track to be ...

Why One Bullish Trader Is "Suddenly Very Nervous About The Market"

Former Lehman trader and BBG macro commentator Mark Cudmore, who traditionally has had a cheerful and quite bullish outlook on the market - with the occasional attempt to time the top - appears to have woken up on the wrong side of the bed this morning and in his latest Macro View note explains why he feels there is a persistent sense of dread surrounding markets, not for any tangible reason, but for a much simpler reason: "no-one else out there seems worried at all."

Of course, record complacency is hardly new, but the moment of realization when all those "complacent" realize they are on the same side of the boat presents the biggest threat to the narrative, as it is precisely when the marginal buyers decide it is time to sell ahead of everyone else, that what ensues next is an avalanche of liquidation frontrunning.

His full thoughts below:

The Lack of Nervousness is Making Me Very Nervous: Macro View

I'm suddenly nervous about global equity markets and it's not for any good fundamental reason. My concern is primarily driven by the fact that, for once, no-one else out there seems worried at all.

On Tuesday, the Dow Jones Industrial Average fell the most in eight months, with the MSCI All Country World Index suffering the most in five months. The losses are widespread but it seems nobody cares.

"This is just a healthy correction amid a strong bull market," is the rough consensus. I've been repeating the same thing myself on Bloomberg TV. Where are the bears? A 33% jump in the VIX across two days would normally have them very animated. Yet they are silent.

Tax cuts are now cited as a positive game-changer, only a month after their impact was doubted. Higher yields are perceived as a sign of economic optimism rather than a reflection of monetary tightening. Dollar weakness now apparently only brings global economic benefits, even thou ...

Frontrunning: January 31



As Yellen Hands Off at the Fed, Whither Her Go-Slow Approach? (WSJ)

'This is our American moment,' Trump urges cooperation (Reuters)

President Tries Taking On a New Role: Optimist (WSJ)

Trump's Olive Branch to Democrats Cut Short by Divisive Tone of Speech (BBG)

Signs of Old Age Abound in a Bull Market Closing In on History (BBG)

Japan's Fujifilm to take over Xerox in $6.1 billion deal, create joint venture (Reuters)

Bitcoin Is Having Its Worst Month in Three Years (WSJ)

For Bezos, Buffett and Dimon, a Health Push Years in the Making (BBG)

Rival Employers Dread Possible Arrival of Amazon HQ2 in Their Town (WSJ

For Bezos, Buffett and Dimon, a Health Push Years in the Making (

Electronic Arts: On to the Next Battle(field)

In the videogame business, there's always the next battle. That works out particularly well for Electronic Arts.

Samsung Still Saying Thanks for the Memories

South Korean tech giant will have to show there's life left in the chip cycle for its shares to advance

Watch Out: The 'China Price' Is Weakening Again

Faltering price gains in China, along with weakening global trade momentum, could deliver a one-two punch to exuberant global markets.

Market Snapshot: Dow set to open 220 points higher as stocks attempt to rebound from ugly start to week

U.S. stock futures are set to rise firmly higher on Wednesday, putting the Dow on track to recover some of its roughly 540 points lost over the past two days.

Metals Stocks: Gold gains as dollar drops ahead of Fed announcement

Gold futures advanced Wednesday, helped by a weaker dollar index, though advancing even as stocks looked to reclaim a portion of the sharp declines that have marked the start to the week.

Economic Report: U.S. adds 234,000 private sector jobs in January, ADP says

Employers added 234,000 private-sector jobs in January, according to a report from ADP released Wednesday.

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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