Market Alert - Pre-Market

Futures vs FV: SP +2.75; DJ +32.59; NASDAQ +3.56

Futures have scratched off negative and are currently just off the pre-market recovery highs. The economic data appears to have aided a futures recovery that was already underway.

Retail Sales, June: 0.6% vs 0.2% exp vs 0.2% May (from 0.5%)
Of course, it is easy to have big jumps when you revise the prior month sharply lower.

Overall year/year: 2.7%

Ex-auto & gas: 0.7% vs 0.4% vs 0.4%

Control group: 0.5%

This looks better and is better. It will be heralded as a good sign. Given this economy, any improvement is good. BUT (you knew it was coming), at 2.7%, this is JUST over recessionary levels. Sales cannot break higher and hold a trend higher.

Interestingly, food and drink establishments slowed their sales yet this is the largest jobs creating area in this economy.


CPI, June: 0.2% vs 0.3% exp vs 0.2% prior
Core: 0.2% as expected vs 0.2% prior. Year/year: 2.3% vs 2.2% prior. Matches February and that is the highest since 9/2008.

Empire State Manufacturing, July: 0.55 vs 5.0 exp vs 6.01 June


China: GDP 6.7%, beating expectations. This appears to have halted the slide of GDP BUT many are questioning what it cost to get this number. In other words, the debt escalation. Rabbobank already estimated Chinese debt at 3x the size of its economy. With private investment at 0% for the quarter where did it come from? Government money pushed into state-owned companies, of course the most inefficient place to put the money.


OTHER MARKETS
Bonds: 1.565% vs 1.552% 10 year

EUR/USD: 1.111 vs 1.1117

USD/JPY: 106.07 vs 105.40

Oil: 46.11, _0.43

Gold: 1330.00, -2.20


Futures are set to open higher, slightly so, the picture somewhat muddled the past 45 minutes as the initial jump on the data has softened toward the bell.

We will see if this builds into something better. It is expiration and virtually no volume this week. That could mean it has been reserved for today and that means a bit more volatility.

Good run, a bit soft after the Nice terror attack, economic data not bad in the US and on the headlines in China.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
______________________________________
Alert Key
http://www.investmenthouse.com/alertkey.htm


Customer Support: http://investmenthouse.com/contact_us.php