Market Alert - Pre-Market

Futures vs FV: SP -2.21; DJ -41.35; NASDAQ +9.79

Shocking. Never seen anything like it. The audacity.

Terrorism? Protests at the DNC convention? No.

The BOJ barely budged on stimulus, raising ETF purchases to 6T yen from 3.3T yen. More than that, it included a statement that it would undertake a 'comprehensive assessment' of its stimulus. Some say that means it will announce more at the next meeting. I am not so sure of that. I posit the BOJ may, after over two decades of depression fostered by these policies, be rethinking and reshaping what should be done.

IMF: More shock. The IMF admits that its restructuring requirements and policies caused the Greece depression.

US Q2 GDP 1st iteration: 1.2% vs 2.4% expected (some saying 3+%) vs 0.8% Q1 (from 1.1%).

Add all of this up and could it be possible that the anti-establishment, outsider movement in US politics (one the democrats were able to crush but the republicans not) is also showing up elsewhere in the world IN the establishment? So much has gone so wrong under their leadership that perhaps the backlash is taking place all over the world.

GDP: 1.2% vs 2.4% exp vs 0.8% prior (from 1.1% Q1 final)

Core PCE: 1.7% vs 2.1% Q1
Business Investment: -2.2%, third straight quarter lower.
Consumer: +4.1% vs 1.6% Q1. That SAVED the report as it added 3% to the final GDP number.

GDP last 3 quarters: Less than 2%. Juxtapose that to the rosy scenario painted Wednesday night at the DNC Convention. Who is 'peddling fiction'? The facts, as we have reported month after month after month, do not support the grand conclusions about the present and future being made. Nothing new there, just given the election cycle it is more apparent given the grand speeches and statements that are more based on what the candidates would LIKE the facts to be versus what the facts really are.

EU GDP: 0.3% as expected. Year/year: 1.6% vs 1.5% exp vs 1.7% prior
France GDP: 0.0% VS 0.2% exp vs 0.6% prior. Take off velocity?


OTHER MARKETS
Bonds: 1.494 vs 1.50%

EUR/USD: 1.1157 VS 1.1077. Dollar falling farther.

USD/JPY: 102.72 vs 105.30. Dollar breaking back into the downtrend below the 50 day MA's.

Oil: 40.86, -0.28

Gold: 1348.30, +7.10


Futures are off the lows but will open lower for SP500, DJ30. NASDAQ is buoyed by AMZN and GOOG results and we will likely take more gain on those positions today though we want to let some run if they are holding their gains.

Markets are not diving post-BOJ and after a terrible US GDP miss. Perhaps investors/traders figure the weak data keeps the Fed indefinitely on hold (Durables, now GDP) and thus they are holding up relatively well. Relatively. Still nothing is pushing stocks higher. This would be the day they would make a move now that all is factored in. But then there is Monday after that, after a weekend of mulling just what happened this week.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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