Market Alert - Pre-Market

Futures vs FV: SP -3.59; DJ -26.48; NASDAQ -7.43

The countdown to Yellen on Friday at Jackson Hole is underway and stocks are sluggish -- again -- in advance. The market is suffering from chronic inability to hold a gain. Yes the market is holding up in some cases, trending higher in others (RUTX, NASDAQ, SOX). One day higher, the next day gives it up. That suggests a market that is ultimately undecided about the future but there is nowhere else to put money so they put it in equities and bonds. Then when news hits it readjusts accordingly. In short, not a ton of conviction.

There are still good leaders. Biotechs/Drugs took a hit Wednesday but other groups held up well. That is the one saving grace of this market.

BUT . . . this slow grind cannot last forever. At or near index highs, unable to push higher. Low volume. You can see why the billionaires are concerned. Some much more than concern.

Stocks will have a chance to prove bids again today, and it seems better at starting softer and coming back. It certainly cannot hold a lead of late.

Durable Goods Orders, July: 4.4% versus 3.5% exp vs -4.2% prior (from -4.0%)

Ex-trans: 1.5% vs 0.4% exp vs -0.3% prior (from -0.5%)

Business proxy: 1.6% vs 0.3% expected.

Year over year the orders stink (-6.4%) but mo/mo showing some hope as economic data continues swinging back and forth.


OTHER MARKETS
Bonds: 1.577% vs 1.156%

EUR/USD: 1.1293 VS 1.1300. Dollar up slightly

USD/JPH: 100.52 vs 100.30

Oil: 46.65, -0.16


Stocks starting lower, again apparently waiting on Yellen Friday. Earthquake in Italy is tragic, storms in Midwest are tragic, Louisiana flooding is tragic, Western fires -- you get the picture.

Mylan came on CNBC and said it had to have a list price of $600 but that was never intended for consumers to pay that. The CEO was clearly very frustrated by the situation, so much so she could not really tell her story. The salient takeaway: the US subsidizes the rest of the world's cheaper drugs, something I was arguing long before Obamacare was passed. Now the situation is even worse thanks to the ACA as people cannot even pay their deductibles under the ACA to use the insurance they have to buy. So, we have people insured but it is wasted money because they cannot pay the deductible. Just let them self insure with an HSA and at least have the $300 (with the rebate) to get an Epipen. We need them in our family and with every other cost a family faces going up, up, up, it hurts. Families save for college, medical care, housing, etc., but then costs go higher and higher but you get no relief because you 'make a lot of money.' Hmmm. I guess that is why there is so much uprising in this year's election cycle?

As for stocks, starting slow and we will see if bids return. Key sector of the day is biotechs/drugs: can they rebound from Wednesday? Don't want the market to lose these kind of leaders or the move erodes.

Will defend positions again but watching to see how the weaker open plays out, i.e. if the bids once again return.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
______________________________________
Alert Key
http://www.investmenthouse.com/alertkey.htm


Customer Support: http://investmenthouse.com/contact_us.php