Market Alert - Pre-Market

Futures vs FV: SP -6.05; DJ -53.38; NASDAQ -20.50

Lots of gloom out there and futures have eroded al morning. They bottomed, however, about 2.5 hours back, slowly started to climb, and are now actually moving higher, spunkily, ahead of the open.

Brollover? Is the Brelief rally over? Those are the fears today, and combined with a GS call of a 'sharp stock slump' in the 'next few months' has a nice dose of gloom today. Given the time of the year, that call fits in terms of market patterns.

As noted, a lot of fear out there today as EU banks fall again to post-crisis lows in terms of stock prices.

EU Retail PMI: 48.5 VERSUS 50.6 PRIOR

Germany Factory Orders: 0.0 vs 1.0% vs -1.9%

US Trade Deficit: Exports slow as currencies around the world fall against the dollar (though euro is not down that much versus greenback).

Bill Gross (Vanguard): People should worry about the return of their money, not return on their money.

See, plenty, plenty of gloom.


OTHER MARKETS
Bonds: 1.36% versus 1.367%. The surge has slowed just a bit, though new highs again for bonds. Time to refinance, though they may be paying YOU before too long to own a mortgage. No kidding.

EUR/USD: 1.1067

USD/JPY: 100.63. Getting to that magical 100 level where Japan will be forced to intervene.

Oil: 46.29, -0.31

Gold: 1372.90, +14.20

Futures continue to work higher into the open, suggesting the pre-market gloom is a bit overdone. Talk of no rate hikes but instead QE, stimulus, etc. All from central banks of course, not governments as neither the US nor EU can do anything with the US election coming and Brexit.

Again, central bank action has been the market salvation and inflator. As things get worse, more talk of stimulus arises. The question is whether the central banks can still do anything or if they are out of gas.

We are going to watch how the recovery in futures continues into the session. Stocks will start lower but we will see how far they upside momentum pre-market futures recovery lasts. It may be that we get downside entries after a lower open rallies but then stalls and we suffer 'Brollover.'



Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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