Market Alert - Pre-Market

Futures vs FV: SP +16.01; DJ +123.13; NASDAQ +30.35

World markets continue to recover from the 2-day panic. Futures are up since the early morning, steadily climbing in a slow rise toward the open. Oil higher, stocks higher, bonds settling back some. All is well?

Several stories focus on possible central bank stimulus as the reason for the recovery, but the more the markets recover in hopes of stimulus the less likely stimulus is. Banks may have softened their stance on hikes (the Fed) but they don't want to act if unnecessary. So, recovering markets means less chance of easing.

Of course, as of Tuesday the FFFutures contract was pricing in easing down the road . . .

May Spending: 0.4% vs 0.3% expected vs 1.1% April (from 1.0%)
Income: 0.2% vs 0.3% expected vos 0.5% April (from 0.4%)

More reality numbers than the April surge. Saw a jump in many indicators over that time and all of them have unfortunately come back to reality. Again, no changes in policies, no real changes in results. Saw that with the GDP report that was inflated by phone healthcare spending that is mandated by the ACA.

Real spending: 0.3%

Earnings: NKE beat and is higher after being lower last night. GIS beats as well.

OTHER MARKETS
Bonds: 1.471% vs 1.458% 10 year. Slowly falling after the gap to a higher high.

EUR/USD: 1.1115 vs 1.1086

USD/JPY: 102.75 VS 102.615

Oil: 48.23, +0.38

Gold: 1324.10, +6.20


Stocks are set to continue their recovery post-Brexit vote. Tuesday saw some recoveries of the 200 day MA while today they try and build upon that. Not convinced that Brexit drop was just a blip, but we can be persuaded otherwise if good stocks continue to move higher from good patterns. If they show the moves the facts speak for themselves.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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