Market Alert - Pre-Market

Futures vs FV: SP +4.35; DJ +40.64; NASDAQ +8.87

Futures are holding some decent gains to start the new week, trying to build upon the move last week. Friday was not that strong for the market overall, but some current market leaders in good position made good moves. Last week the market had a tough time holding early gains outside that Thursday session. Thursday was fairly solid, and now we see if the market can pick up again after taking an overall day off Friday.

Oil: A bit higher as word is Russia is talking with Saudi Arabia on methods to get prices higher. Oil is trying to continue its recovery though has an ABCD downside pattern setting up.

New York PMI (Empire manufacturing), August: -4.21 vs +4.0 ex vs +0.55 prior.
Was expected to rise but flipped negative after 2 months positive. Volatile, showing some life, but not nearly out of the woods.

The Fed: The theme you see in the financial rags is the Fed is easier now in terms of impending rate hikes. After the Friday Retail Sales Report, the Fed Funds Futures contract showed a 42% chance of a 2106 hike versus 49% prior.

Japan GDP: 0.0 vs 0.2 vs 0.5. Year/year: 0.2 vs 0.7 vs 2.0 prior.
Disappointing again. What is new? Being in a depression sucks.

DB analyst: One of the bank's analysts has joined the bear side, or at least voiced his concerns. He notes that it is simply financial asset inflation thanks to central bank policies versus real growth. He says it will take a market crash, a big one such as 50%, to change the policies to growth policies on the fiscal side.

That is no news to us. I have said many times the policies must change for the outcome to change. I will add a twist to it: there is no point in change unless there is a crash BECAUSE the money printing, free money, and asset price inflation directly benefits those in charge. Until that breaks, those in power will do whatever it takes to stay in power, including doctoring news feeds, search results, media reporting, economic data, etc. to maintain the current system.

One other point he makes: this could go on for years. Oh well.


OTHER MARKETS
Bonds: 1.534% vs 1.51%. Off a bit to start the week as TLT continues building its pennant off the last rally.

EUR/USD: 1.1177 vs 1.1162

USD/JPY: 101.155 vs 101.25

Oil: 44.84, +0.35

Gold: 1342.10, -1.10


All the political intrigue aside, as I said over the weekend, we work in the market that we have. This one is still currently hated by the powers that be. Art Cashin is worried that the market is approaching stall speed as the new highs were so incremental. He is right: we always say they need to break free and put mileage on the other highs versus just hanging around. The latter shows a lack of sustained buying.

There are leaders that are working. This week the upside would really benefit from the NASDAQ big names moving up and SOX making a break to a new high.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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