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Tuesday, September 18, 2018

Market Alert - Pre-Market

Futures v FV: SP +4.3; DJ +39.88; NASDAQ +10.52

Dow futures were up 88 as initial reports were China's response to Trump's trade actions last night were 'measured.' Then China came out with its own counter tariffs and futures cut the gains rapidly.

US: 9/22 will implement 10% tariffs on $200B in Chinese goods, increasing to 25% to start 2019. IF CHINA RETALIATES, another $267B will be added. It appears China has retaliated.

China: Cancelled trade talks. Will implement 10% tariff on $60B of US goods if US implements on 9/22. Will look at/engage in 'qualitative measures' such as port slowdowns, slowing approvals.

Trump: China is meddling in US elections by attacking US farm and industrial products.

Ross: China is 'out of bullets' in terms of what it can tariff. But, what about those qualitative measures . . .?


Earnings misses: AZO (TL); GIS (TL); FDX (BL); ORCL (TL). As noted a month ago, some disturbing increase in top line misses.


WMT upgraded


AAPL: Exempted from new tariffs on China


M&A: Univar buying Nexeo (chemical industry)


OTHER MARKETS
Bonds: 3.009% vs 2.99%

EUR/USD: 1.711 vs 1.1682

USD/JPY: 112.04 vs 111.84

Oil: 69.89, +0.98

Gold: 1250.90, +0.10


Futures gapped higher in recovery, worked upside nicely at 8:00ET, but then the China tariffs dropped the futures. They are, however, holding the gap level from the start of the session.

Would not be surprised to see selling attempts again during the morning session then a steadier bid returns in the afternoon.
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Jon Johnson, Chief Market Strategist
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Monday, September 17, 2018

Market Alert - To the Close

I could be wrong of course, but you know how the market hates uncertainty and a report that the President is going to have a trade announcement but no details creates a lot of uncertainty -- that is obvious just looking at the various headlines and speculations on the many financial websites. Uncertainty before, certainty after, though if it is hideous news, that would not be good. With certainty, however, at least the market can price it.

SP500 -17.09, -0.59%
NASDAQ -113.87, -1.43%
DJ30 -104.17, -0.40%
SP400 -0.87%
RUTX -1.08%
SOX -1.37%
NASDAQ 100 -1.46%


______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Market Alert - Last Hour

More trade issues are hurting. Stocks sold off early but then recovered decently. In the past half hour we were told the President will make a trade announcement after the close. Everyone speculating but the consensus is it won't be good. The indices are now at session lows.

SP500 -16.84, -0.58%
NASDAQ -108.43, -1.35%
DJ30 -98.14, -0.38%
SP400 -0.92%
RUTX -0.93%
SOX -1.08%
NASDAQ 100 -1.36%

The knee jerk was lower, we will see if there is a rebound in the last half hour and if some of these stocks can recover.

AAPL is subject to a double dose as there are always worries about sales in China and now Rosenblatt is saying the new iPhone is not selling as well at first as the original X.

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Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP -2.73; DJ -23.67; NASDAQ -20.75

Futures trading lower in a narrow range every since the open. Trying to catch a bid heading toward the open -- showing signs of interested bids so could see the softer open turn into some buying.

Causes for the softness? The 'usual.'

Trade: Friday Trump said he was ready to go with the $200B in tariffs, talks or no talks. Of course China says that puts the possible new trade talks in doubt. As if they were not in doubt already.

China says it won't be just defensive in a US trade war. Oh my.

Trump: Jobs and dollars 'flowing' back to the US. If countries don't trade fair with the US they will be 'tariffed!'


New York Empire PMI: 19.0 vs 23.0 exp vs 25.6 August.
Prices paid at a 76 month high.
Expectations lowest since April.


Upgrades: AMZ; BBBY; LULU


KO: Reports KO is partnering with another company (Aurora Cannabis) to produce cannabis infused drinks. Things go better with Coke . . .


OTHER MARKETS
Bonds: 3.014% vs 3.00%

EUR/USD: 1.168 vs 1.1628

USD/JPY: 111.96 vs 112.04

Oil: 69.47, +0.48

Gold: 1203.30, -2.20


Softer open no doubt but stocks showing a bit of bid as the opening bell approaches. Could be the old 'softer open in an uptrend leads to bids' situation. By the way, this week is FOMC rate decision week with an expected +25BP after the meeting.

______________________________________
Jon Johnson, Chief Market Strategist
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Friday, September 14, 2018

Market Alert - Last Hour

Stocks cruised early more or less, selling off the higher open to the end of the first hour then rebounding quite nicely to midday. At that time Trump indicated he still wanted to go ahead with the $200B in China tariffs even if the 2 sides were going to meet. The market did not like it and bombed to new session lows over the next hour.

Intuitively it makes sense, i.e. keep the pressure on your adversary versus dropping the pressure just because the sides talk. That is how the US did things in the past and all it does is prolong the giant pain in the b**t with nothing accomplished.

For the market, however, it hated it. It has since come back off the lows in the last 2+ hours but has not reached the pre-Trump tariff comment highs, at least for the large cap indices. Midcaps, small caps, chips ARE back to those pre-comment peaks.

SP400 midcaps show a solid break higher off near support, RUTX as well. Solid upside bounces indeed. Good to see these economically sensitive indices bounce off support, but of course they theoretically stand to gain the most from tariffs.

Some interesting moves with OI position spiking close to 10%, NVDA 1.6%. Others test, e.g. HD, AMZN, AAPL, CRM, NFLX, TJX -- not bad action at all for a Friday with renewed tariff worries. Indeed, some of these are setting up entries for new positions.

OPK started trading this afternoon and is down, but it likely just has to get the pent up selling out and then it shows if it can rebound.

Stocks are off the midday lows as noted, now after a 15 minute or so test of that move we see if they can resume upside into the close the last half hour and put a decent 'testing mode' spin on the day.

SP500 -0.31, -0.01%
NASDAQ -4.07, -0.05%
DJ30 FLAT
SP400 0.48%
RUTX 0.59%
SOX 1.03%
NASDAQ 100 -0.23% -- AMZN, AAPL, NFLX are a bit lower today.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Market Alert - First Hour

Stocks followed futures and opened higher, holding modest gains as they test that higher open a half hour into the session. As the first hour progresses, however, stocks are peeling back from early gains with NYSE large caps negative, growth indices almost there.

SP500 -2.05, -0.07%
NASDAQ 1.99, 0.02
DJ30 FLAT
SP400 0.02%
RUTX FLAT
SOX 0.99%

The opening bounce is dissipating and will have to see when the bids return after an opening pop.

Florence has made landfall and as anticipated, it weakened considerably from the cat 4 hype several days before landfall. Lots of rain and lots of flooding, and that is always the problem. Thank goodness it was not cat 4 or 3 or 2. May back up into the ocean and then have a second landfall later farther south. Not great.

WMT and storm stocks are lower as the carnage was not as horrid as feared 5 days ago.


Bonds: 10 year over 3% for the first time since August. Trying to avoid that flat yield curve.


Retail Sales Aug: Smallest gain in 6 months
Overall: 0.1 vs 0.4 exp vs 0.7 July (from 0.5). NICE revision

Ex-auto: 0.3 vs 0.5 exp vs 0.9 July (from 0.6). Nice revision as well.


Industrial Production: 0.4 vs 0.4 vs 0.4 (from 0.1). NICE revision.
Utilities: +1.2% due to A/C usage
Mining: 0.7% and 0.7% July. +14% in 12 months!

Capacity: 78.1 vs 78.3 exp vs 77.9 prior (from 78.1)


Paul Manafort enters a guilty plea on his second case, striking a deal with Mueller.



______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Thursday, September 13, 2018

Market Alert - Pre-Market

Futures vs FV: SP +8.73; DJ +104.08; NASDAQ +36.44

After a sluggish WED on AAPL product release day, futures are solidly higher, gapping modestly upside early and then trending steadily higher toward the US opening bell. Asia led higher and the other world markets followed. Finally a bit of a bounce in Asia, eh?

CPI, August: 0.2% vs 0.2 exp vs 0.2 July. 2.7% yr/yr vs 2.8 exp. Compare with PPI at +2.9% -- producer prices are rising faster than CPI, meaning a profits squeeze. There are already predictions of declining profits for 2019, and this is some evidence of that theory being correct.

Core CPI: 0.1 vs 0.2 exp vs 0.2 prior. 2.2% year/year vs 2.4 exp.


WSJ: Reports real wages are up solidly while poverty rates are down to levels not seen since 1972. This after poverty levels spiked from 2009 to 2014. I often talk about real time textbook examples of economics, e.g. Venezuela as another example of socialism 'nirvana,' in utter collapse. This new data compilation shows how the big government, high regulation, high taxation, market control policies of the Obama administration are clearly a drag on economics, wages, and standard of living. Removal of even some of the regulation, cutting tax rates, and giving businesses and people more control of their spending and the results to the upside are almost immediate. Cause and effect as the Frenchman on 'The Matrix Reloaded' would say.


AAPL: GS cuts profit forecast


Fed: Says it is possibly being too successful at beating unemployment. Oh come on. 95+M working age people out of the workforce, retirement age people still having to work at Wal-Mart to survive and you say you beat unemployment? As I discussed last week after the jobs report, we are PAYING PEOPLE NOT TO WORK. THAT is the issue. The Fed has not beat unemployment: we are PAYING TO HAVE unemployment.

ECB: Cuts EU outlook officially. Says QE to end by 2019, Rates unchanged until end of summer 2019.


OTHER MARKETS
BONDS: 2.95% vs 2.979%

EUR/USD: 1.1675 vs 1.1604.

USD/JPY: 111.41 vs 111.59

Oil: 69.54, -0.83

Gold: 1214.70, +3.80


Okay, a positive open with AAPL and others rebounding. A bounce, a pause, and now a resumption. We will see if it holds but we like the action and will look to add positions.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Wednesday, September 12, 2018

Market Alert - Last Hour

AAPL's product unveiling was less than exciting, but that was expected. AAPL is lower but nothing serious, and other techs that were lower in pre-release worry are rebounding. AMZN is back to positive, MSFT positive, CRM, etc. NVDA is still off but is bouncing well off an intraday 50 day EMA test. PFE, JNJ, TLRY, CAT, EMR, ETN are all up nicely. Retail is off some today.

A good treasury auction, the best in quite some time, more evidence the US is prospering and other areas in the world (read most) are not. And this is bad?

Jamie Dimon said he could beat Trump in an election because he is smarter. Hmmm. Dimon is part of the establishment, particularly the financial establishment. The last election was about anti-establishment. Being smart may not have anything to do with it -- similar to many things in the US right now and indeed over the past decade and more.

MS says a multiyear bear market is here as earnings fade. More of the talk discussed last weekend. It might be true with the Fed hiking into a flat curve, but for now the trends are holding. At some point they will not.

AAPL: My kids want me to get an AAPL watch for health reasons. We will see. I am not unhealthy and in fact quite fit. But I don't even have an iPhone. I like to bike a lot, fish, hike, hunt, etc. and they want to keep tabs on me. Are you in the same boat? I am touched but wonder if there is an ulterior motive, e.g. keep the old guy alive and producing income. Hmmm. Perhaps if it has an onboard cardio defibrillator . . .

We are looking at WBA on this breakout move. It is a bit softer here in the last part of the session and we are looking to pick up a position.

SP500 1.18, 0.04%
NASDAQ -16.05, -0.20%
DJ30 33.66, 0.13%
SP400 0.13%
RUTX -0.04%
SOX -1.29%

Semiconductors continue to struggle even as AMD surges higher. SOX tapped near the lower trendline of the triangle on the low and rebounded to show a doji at the 200 day MA. INTC, TXN, AVGO and others tested even lower but have rebounded nicely. As I suggested earlier, perhaps this round of downgrades throwing in the towel on the group suggests a bottom.
______________________________________
Jon Johnson, Chief Market Strategist
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Market Alert - CORRECTION NVDA ALERT

This was sent inadvertently. Want to see how it reacts off this initial dip.
______________________________________
Jon Johnson, Chief Market Strategist
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Market Alert - Pre-Market

Futures vs FV: SP -1.84; DJ +1.94; NASDAQ -9.87

Futures are flat, trending lower from a higher start early morning, trading just off fresh pre-market lows.

A lot of undercurrents with of course 'trade' still a backdrop that is referred to several times on each financial station. Not a specific new issue or story with trade, just the 'trade . . .' reference as causing a drag on stocks. Funny, on rallies such as Tuesday nary a reference to trade. When the market is not up, however, hunt for a reason, and 'trade . . .' is an easy cop out.


Fears of a global slowdown are big and it worries me. Not the slowdown, but the reaction that will come. Just as in the late 1990's, the US is strong, much stronger than the rest of the world. There are those who will want to avoid a wide gap between the US and the rest of the world. Those people or their groups crashed the US market and economy in the early 2000's.

ECB: Expected to cut its Euro Area growth outlook

OPEC: Warns of slower oil demand amid growing world economy risks

Asia: Longest stock selloff in 16 years.

This scares those who have a lot to lose. Just listen to the Financial Crisis clips CNBC and others are playing: their fear was that they lose what THEY had, with gratuitous references to the rest of the peons out there. Where the average US citizen wants the US to do better itself and vis- -vis the rest of the world, they do not.

Ah, and you don't hear this on the financial stations (2 of which of the big three are left leaning), but the US is doing what the fellow elected President said it would do: win. Now THAT is insightful, biting, and interesting commentary . . .


AAPL: Has its product unveiling. It is up a fraction ahead. Sometimes it fades after the announcement. We like it because technically it tested a breakout, held near support, started higher. That is good technical action regardless of lower prices for some phones, etc.


Chips: Bad gets worse. MXP downgraded by Steiffel. MU downgraded by GS. Talk about kicking a dog when it is down.

Now that everyone is downgrading, throwing in the towel downside on these, it could be that a bottom is forming. Will have to see how they react, but when everyone has sold, who is there to sell? Question is, will buyers return a bid? Important because SOX and chips are important to the market. Note SOX has not broken down yet, indeed, acting good in its triangle. That needs to stay the case or the market outside chips could start feeling the effects. As SOX goes, the market tends to follow.


PPI, Aug: -0.1 vs 0.2 exp vs 0.0 July

Core: -0.1 vs 0.2 vs 0.1

First decline since February 2017

I suppose this is Fed-Friendly


OTHER MARKETS
Bonds: 2.959 vs 2.979% 10 year

EUR/USD: 1.1588 vs 1.1604. Dollar bounces on weak ECB outlook for EU

USD/JPY: 111.26 vs 111.59

Oil: 70.01, +0.76

Gold: 1200.10, -2.10


Soft starts, as shown Tuesday, are not bad. Now we see if the bids pick up after a weaker open and how chips react to the downgrades on stocks already in the gutter.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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Tuesday, September 11, 2018

Market Alert - Pre-Market

Futures vs FV: SP -6.83; DJ30 -84.77; NASDAQ -31.43

After trying an upside open Monday that did little to change the stock index positions, stocks are set to start lower. Indices testing near support in continuing uptrends. Softer starts in that situation can lead to a return in bids.

Is there a cause? Everyone wants to pin the tail on the reason for weakness or strength, but it is typically the sum of the whole and that is shown in stock charts. Day-to-day the news of course causes swings within the trend. Today that is trade though the financial stations are not discussing it.

Trade: China is filing with the WTO for sanctions on the US. That can result in years of wrangling and no fix for the trade issues. Ironic isn't it? China has the policies that are the farthest from free trade and it says the US is the problem. Well, what do you expect when the WTO allows China to call itself an emerging economy? These worldwide governing bodies are abject failures because most of the countries in them have no idea what free enterprise and free economies are. Thus their guidelines, rules, advice, etc. are all fundamentally flawed because they are based upon central planning. That is why the US under Trump and other more open market Presidents than the prior one want out of these bodies.


Sentiment: Small business optimism is at a record high and the respondents are saying it is a direct result of a much more business and market friendly administration. As one analyst put it, the government's foot is now off the throat of small business. Yes, but it needs to do more, i.e. get rid of the ACA totally and implement a free market in health insurance. The cost of health insurance is still wrecking small businesses on a daily basis.

Ray Dalio, hedge fund billionaire: Markets are in the seventh inning, investors should be more defensive as the upside is limited. I would agree that the risk/reward is nowhere near where it was at lower prices. That does not mean there is not a lot of money to be made on the market leaders as they set up good patterns and continue breaking higher.


AAPL: UBS raises price target to 250 from 215. Will see if that helps snap AAPL out of its recent dips, aided by the President.


TSLA: Nomura now says TSLA is no longer investible, that Musk is a bully, etc. Nothing like personal attacks when issuing an investing comment.


9/11: Memorials, moments of silence, etc. All good. Every school should show the towers falling each anniversary. They stopped teaching the evils of communism and socialism that many of us saw on a daily basis as we grew up and what has that gotten us? A generation who is convinced that the government can hand out free money to all and all problems will end. Oh yes, and if you click your heels together and say 'there's no place like home' you can just go back home and your troubles are over. Facts, principles, economic laws have a way of wrecking those plans, but if you are not taught the downside you have to learn it from experience. As Hal from Rocky Mountain Rescue said in 'Cliffhanger' as one of the bad guys plummeted to his death off the mountain, 'gravity is a b*tch.'


OTHER MARKETS
Bonds: 2.959% vs 2.937%

EUR/USD: 1.1573 vs 1.15946

USD/JPY: 111.37 vs 111.192

Oil: 67.66, +0.12

Gold; 1193.90, -5.90


Okay, futures were up off the lows but are slipping back to the bottom of the rather narrow morning range. Trade is a b**ch for the market near term. NASDAQ has been very volatile pre-market at -19 to -25 to -32. Not a settled in trade.

What we watch for is how AAPL, AMZN, software and the like come off the lower open. We know HD and the storm trades are up again as is TLRY. After a sluggish start the others will show if they are ready to bounce today after a failed early attempt Monday.
______________________________________
Jon Johnson, Chief Market Strategist
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Monday, September 10, 2018

Market Alert - Pre-Market

Futures vs FV: SP +13.02; DJ +113.46; NASDAQ +39.49

A lack of news over the weekend and Monday. The release of pressure is bouncing US stocks in relief after the 'longest losing streak since January 2016' hits the rest of the world. Beware US investors -- the powers that be do not like it when the US gets significantly stronger, economically and in its markets, than the rest of the world. In the late 1990's that happened and the world order decided to hobble the US and in so doing crashed the stock market, then the economy. The US had no investment for 3 years and many high tech jobs left the US never to return.


Okay, happy Monday morning! That opening paragraph is just a reminder that when everything looks great, you have to watch for in your ear as Shoeless Joe Jackson told Moonlight Graham in 'Field of Dreams.' It is, after all, the tenth anniversary of the financial crisis.


Near term the US stocks indices are ready to bounce with many of the leaders that sold back the prior week bouncing early, e.g. AMZN, AAPL, NVDA, even TSLA. Futures gapped higher at the open and have pretty much traded in the same range ever since. These gap opens are always somewhat concerning, but if leaders such as AMZN are ready to move higher after a test, you don't want to wait too long.


Lots of data again this week but it comes later.


Financial crisis: 10 year anniversary


AAPL: Trump tells AAPL to makes its products in the US to avoid impacts from China trade issues.

Trade: No further word on the $267B additional tariffs Trump pondered Friday.


GOP: Unveiling new tax cut proposals, planning on doing so ahead of midterms. That needs to include items to reduce the health insurance cost. Those costs are still high as the ACA is still there, crushing middle class families with insanely high and ever increasing costs.


AMZN: Citigroup ups price target from 2100 to 2250.


OTHER MARKETS
Bonds: 2.944% vs 2.941%

EUR/USD: 1.16061 vs 1.1552

USD/JPY: 111.16 vs 111.05

Oil: 68.12, +0.37

Gold: 1200.60, +0.20


Futures are holding the gap gains, again as there was no more news on tariffs discussed Friday that hampered the market. Is this a gap to buy? You almost have to with AMZN and other leaders. This even as Art Cashin this morning talks of a near term top for stocks here, citing the Goldman indicator among others. It is the old pessimism versus market setup. While gap opens such as this (gap to a range) are not our favorites, we will be looking at AMZN and friends that are coming off nice tests last week.
______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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