Market Alert - Pre-Market

Futures vs FV: SP -1.89; DJ -20.03; NASDAQ +2.15

Unlike prior sessions this week, LOTS of news and not just the schedule economic data.

Philly Fed, July: -2.9 vs 5.0 exp vs 4.7 June.

Jobless claims: 253K vs 265K vs 254K prior

Earnings: Helping with still overall better than expected results (MSFT, QCOM, EBAY, BIIB) but futures are less than excited.

M&A: KMTUY buying JOY (heavy equipment); Galina buying RLYP

Could it be the other news out?

Japan: Kuroda says there will be "no new or possibility for helicopter money.' The dollar is just a bit lower, surprisingly holding its break over the 50 day MA downtrend.

ECB: Leaves rates unchanged. Draghi is in his press conference stating
-Brexit is a headwind and the ECB is watching the post-Brexit economy closely
-It warranted, the ECB will use all available instruments to effectuate its mandate
-Growth outlook skewed to the downside

Okay, a market driven by central bank action has to mull these central bank comments. Thus far it is not that pleased as futures track back toward their early morning lows.


OTHER MARKETS
Bonds: 1.59% vs 1.58%

EUR/USD: 1.1044 VS 1.1014. Euro up on ECB non-action

USD/JPY: 106.16 vs 106.81.

Oil: 45.72, -0.07

Gold: 1322.20, +2.90


Okay after a break higher by NASDAQ and a further break upside by SOX thanks to the big names, there is pressure in those groups. EBAY is fine, QCOM fine, but INTC is not. LUV in airlines had poor passenger numbers and its results were lower, surprising those believing that all is well in the world economies.

A break higher met with selling is near the top of the list on bad reactions for the upside, but if you look at NASDAQ it is hanging in better than the other indices. Thus it may be a case again where the big names, sans INTC, work to lift the rest of the market out of its lethargy and continue a pre-earnings run. After all, earnings are for the most part beating with respect to the big names.

Earnings are important, but so are, perhaps more so, the central banks. Draghi is promising, but actions speak louder than words and the futures traders are not 100% on board that the central banks are there. Thus a softer open, but after a good move upside a softer open is not a bad thing. It is the finish that of course counts.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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