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The Morning Look

ByGary Kaltbaum

Market Update:

Stock futures are relatively quiet ahead of Monday’s open as the market pauses to digest last week’s very strong rally.

Gary’s Thoughts: More of the same pre-market this morning. As we write this, NDX futures down…S&P futures up. Banks,steel and “Trump stuff” continues to get the bid. Keep in mind, these areas are technically, VERY extended. But extended can stay extended as we have had a “sea change” event. The norm would be for these areas to start pulling back…but norm does not matter this second. Also, another theme that continues pre-market is the bruising of emerging markets. (EEM) Also, Russia RSX), Brazil(EWZ), China (FXI) and other areas continue to head south. We mentioned the word “bifurcated” in our weekend report. We hate the word but it defines the market right now. The bond market is again crushed this morning as 30 year almost 3%. The Fed probably has no choice now on raising shorter rates.

Economic Calendar:

  • 4-Week Bill Announcement 11:00 AM ET
  • 3-Month Bill Auction 11:30 AM ET
  • 6-Month Bill Auction 11:30 AM ET
  • Robert Kaplan Speaks 1:20 PM ET
  • Jeffrey Lacker Speaks 4:30 PM ET
  • John Williams Speaks 6:30 PM ET

Highlights:

  • Trump Shakes Up Transition, Begins to Articulate Priorities
    Gary’s Thoughts: Can’t imagine trying to hire over 4000 people in 70 days. 
  • Powerful Quake Strikes New Zealand, Triggering Small Tsunami
    Gary’s Thoughts: New Zealand on bucket list. We wish them well.