Market Alert - Pre-Market

Futures vs FV: SP -1.28; DJ -15.85; NASDAQ -2.52

Earnings ramp to their busiest week of the season thus far (1/3 of S&P reports) and they will play a dominant role as the week progresses. There are other items this week as well, e.g. central banks.

Kind of quiet on all fronts this morning, however.

M&A: VZ is in fact buying YHOO's core business. And . . . who cares?

EU: Germany business client index is greater than expected. I guess Brexit was not the end of the world for the EU economies as thought. They have their own world of problems other than just the UK maybe leaving. Yes, maybe.

Central banks: FOMC releases its next rate decision on Wednesday. Bloomberg reports that Yellen will need 'overwhelming' evidence before she moves on rates.

BOJ ends a 2-day meeting Friday and expectations are for more stimulus though Kuroda has said no helicopter money.

Durable orders, first read of Q2 GDP out later this week.


OTHER MARKETS
Bonds: 1.568% vs 1.56% 10 year

EUR/USD: 1.0984 VS 1.0973

USD/JPY: 106.09 vs 106.09

Oil: 43.50, -0.69. Oil continues its fade as it consolidates the last rally. More rigs turning in the US the prior week as companies take heart that oil prices stabilized. Of course when they start drilling more, so much for stabilization.

Gold: 1324.78, -6.80. Gold continues its test of the last run as well.


Futures were modestly higher early on but have slowly eroded those gains. Doesn't really matter one way or the other: they are around the flat line and provide a basically clean slate for stocks to start the week.

Last week ended up though it was not all candy and nuts. Thursday threw in some higher volume selling just as the indices reached for higher highs. The buyers reappeared Friday, but were weaker.

SOX is a bit overbought and you can argue that case for SP500 and DJ30 as well. RUTX, SP400, however, have put in 8 session lateral moves, consolidating the last rally. Not a bad setup for the small and midcaps.

This is a big week for earnings as noted, and several current positions announce results. We will be watching them and how they perform, but will be closing several ahead of results, at least portions thereof. It would be nice to get a further run today and Tuesday, but sometimes there is a lull after the first round of results until the next big names show their hand, e.g. AAPL, AMZN, GOOG.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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