Futures vs FV: SP +6.06; DJ +39.33; NASDAQ +12.39
Stocks are set to start another session higher with futures trading at the session highs going into the open. Weaker overseas data stokes the stimulus hope fires farther, and a US Fed official says Japan style helicopter money would be the Fed's next step.
China: Export data is weak.
Exports: 4.8%
Imports: -8.2% vs -5.0% expected
Devaluation: China has devalued the yuan over the past five weeks.
Japan Industrial production: -2.6% vs -2.2% exp vs -2.3% prior.
Capacity: -2.4 vs -1.0 prior
EU Industrial production: 0.5% vs 1.4% exp vs 2.2% prior. -1.2% year/year versus +1.4% prior
US Import prices: 0.2 vs 0.5 exp vs 1.4% May. year/year prices are down for 23 consecutive months.
Germany: Issuing a 10 year bond with a zero coupon and -0.05% yield. Wow. It is official: negative rates are now institutionalized.
Federal Reserve: Governor Mester told ABC that QE has "proven to be useful." She went on to further say that Helicopter Money, the phrase coined by Ben Bernanke and now being used in Japan, "would be sort of the next step if we ever found ourselves in a situation where we wanted to be more accommodative." There you have it, laying the groundwork for dropping money from the skies in the next crisis.
OTHER MARKETS
Bonds: 1.48% versus 1.51% 10 year. After 2 sharp days lower, bonds rebound in the overall 4 week blast higher.
EUR/USD: 1.1084 vs 1.1061. Euro bounces back
USD/JPY: 104.55 vs 104.71. Dollar fades a bit after two very strong days.
Oil: 46.29, -0.51. This after the API report last night showed a larger than expected draw.
Gold: 1341.20, +5.90
Futures have faded modestly off the highs as the bell nears, but holding nice moves. Three solid upside sessions after a short pause has the indices straight up after the Brexit dump. Again, we want to look at banking some gain if we get the opportunity, i.e. this opening move expands upside a bit more.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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