Futures vs FV: SP +3.68; DJ +40.32; NASDAQ +5.24
Futures are sluggish, trading near flat on the morning as the stock indices pause after two sharp recovery days from two sharp downside days.
The indices are calmer but the news is not.
Boris Johnson says he will not run for UK PM.
Reuters reported the Chinese were willing to allow the yuan to weaken to 6.80. China denied this but the yuan crashed anyway. China stepped in to actually support it.
Earnings: PIR, TSCO lower their 2016 outlook. TSCO is a surprise.
M&A: LGF buying STRZA in media.
Jobless claims: 268K versus 265K expected vs 258K prior. Why so low in the news queue? Because these absurdly seasonally adjusted numbers mean nothing at this point.
EU CPI: 0.1% year/year vs 0.0% exp vs -0.1% prior.
Core CPI: 0.9% versus 0.8% vs 0.8%.
It is sad, indeed bad, when your core inflation matches your GDP growth numbers.
OTHER MARKETS
Bonds: 1.502% vs 1.51% 10 year. After fading a bit Wednesday, bonds are slightly higher on a less exuberant stock market.
EUR/USD: 1.1114 vs 1.1104
USD/JPY: 102.65 vs 102.85
Oil: 48.74, -1.14. Steadily sliding toward the open.
GOLD: 1321.30, -5.50
The hope of stimulus keeps the markets levitated though they are not nearly as strong as they appeared last night when the bank stress tests were released along with a truckload of dividend hikes and stock buyback announcements. A bit of extra goose, a little more Fed-arranged market stimulus as the master in charge of the data told us the banks are just fine. Everyone who believes that can buy them today.
Modest gains to start as the news is not enough to keep stocks surging. Slower burn and we will see if it continues and provides some entries on some good patterns we have. This is the first pause of sorts and how the market reacts tells more about the legs for this rebound move. Thus far nothing says it has hit the wall so we let upside continue, but it has to show it can take out next resistance to overcome the loose presumption that the indices are in just a relief bounce. Have not recovered the pre-Brexit levels, so that has to remain the presumption that is of course rebuttable by good stocks in good patterns making good moves.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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