Market Alert - Pre-Market

Futures vs FV: SP +17.74; DJ +156.76; NASDAQ 37.04

No further selloff to start Tuesday as futures, up modestly after hours Monday, surge as world markets recover. The bottom? Has Brexit been factored in?

What has been factored in is the hopes of more bailouts. EU leaders are meeting in Brussels to discuss the Brexit. At the same time Mario Draghi at the ECB delivered a statement that central banks should align monetary policy globally. Italy seeks a 40B euro bank bailout. Yes, markets are excited after 2 hard selling days, excited about more bailouts.

Thus the break higher is dubious. It feels nice, looks nice, but it is dubious given the action. And the causation. That is mostly a technical read and if central banks do act that changes the landscape as noted last night. Until then, however, the technical side would prefer more of a washout. That said, if there are good patterns that held up during the selling, and there are, if they make moves they are telling you they are stronger.

Q1 GDP, final: 1.1% vs 1.0% ex vs 0.8% prior.
Hey, they managed to get it over 1.0 for the quarter as was the plan. They had to get creative, however, as consumption dropped to 1.5%. That is just 2% annually, the lowest in 2 years.

Another powerful GDP report. IF you are Europe, or Japan. Remember I always said we were Japan? I took so much heat for that but we did everything Japan did from bailing out huge companies that should have failed to massive deficits, closing markets to competition, to 0% rates. And, now, a chronically mediocre, historically growth-less economy.

Greenspan: The US must go back to a pre-1913 gold standard in order to rescue itself. This is staggering from the architect of Fed intervention to weaken the dollar.

Summers: Brexit 'worst shock since WWII' and central banks are 'out of ammunition.' Ever hear of the financial crisis? No, it IS the biggest shock to the one world order progressives. To everyone else it is getting out of a failed experiment in socialism one-entity rule, something that has always failed in the world.

Jobs: Dow laying off 2500 (4%) as the 'synergies' of its merger with DD to come are already showing up. What a lovely thought to those fired: your firing was good for the company.


OTHER MARKETS
Bonds flattish: 1.468% vs 1.46% 10 year

Euro: up slightly versus dollar at 1.1077

USD/JPY: 102.385

Oil: 47.49, +1.16

Gold: 1317.40, -7.30


Futures are near morning highs, markets clearly ready to rally on the open. SP500, DJ30, RUTX and how they react to the 200 day MA is the first thing to watch. After that, how oil stocks recover with oil jumping upside to recover some lost ground today.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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