Market Alert - Pre-Market

Futures vs FV: SP -1.48; DJ -20.17; NADSAQ +8.77

The day after the FOMC. Futures are a bit lower though hardly an indication of selling. More status quo though NASDAQ is up as the big names help push just a bit. Some earnings, some deals are helping. The bigger question is once trade kicks off how will stocks react to a bit more hawkish Fed? Bonds and gold were in the 'no hike near term' camp Wednesday afternoon, stocks were undecided.

Earnings Beats: CRUS; DOW; CL; HSY; HOG (though lowered sales outlook as US weakened); AMGN

Misses: MRVL (but upped guidance); F (BL); COP (TL, BL); WFM (TL); GPRO (BL); CAKE (TL, SSSales lower)


Trade Imbalance: -63.3B vs -61.2B exp vs -61.1B May


Jobless claims: 266K vs 260K exp vs 252K prior. Ho hum


M&A: ORCL buying N


Fed: DB says the Fed's procedures are a form of torture. Oh, I need a safe space after such vile language! Actually, DB's points are dead on: "The pattern for the Fed is that you slowly talk up the prospects of an imminent hike, you then get closer to it, build it up even more and then just before you pull the trigger something invariably happens . . . to force you to pull back and start from scratch."

That is a corollary to something we have also noted over the years: the Fed lays all of its rate hiking plans out carefully as if a vacuum, implements them but invariably there is a wildcard that springs up in the middle of or at the end of the campaign and throws all calculations out the window. That is what you get in MANAGED economies. The planners are so smart, know so much, but they know nothing about markets.

Splits: AA reverse splitting 1-3 to better facilitate its split into two companies.


OTHER MARKETS
Bonds: 1.53% vs 1.51%. Backtracking a bit of the gains post-FOMC Wednesday.

EUR/USD: 1.1095 VS 1.1061. Euro again a bit stronger

USD/JPY: 104.83 vs 105.24. Dollar still cannot break free of the downtrend.

Oil: 41.96, +0.04

Gold: 1349.50, +15.00


SPY futures are off their lows hit an hour back but are still modestly lower. A heavier start to the session is okay. Allows bids to return to market if they want to. The question of want is still there because the FOMC is out and stocks are still somewhat indifferent, FB is out with blowout numbers but is well off the overnight highs.

There are some more heavy hitters to come, e.g. AMZN, GOOG, and Friday there is first read on Q1 GDP. Perhaps the market is waiting on that, but with AAPL, FB, Japan's pre-announcement of stimulus, and the FOMC not overtly hostile, you would think the market would have what it needs. The fact that it has not moved off a good pattern in this situation is a bit concerning, but thus far the patterns are good and leadership is providing . . . leadership.



Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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