Futures vs FV: SP -1.87; DJ -24.30, NASDAQ -5.70
Futures fell about 2 hours back and have only recovered modestly. End of quarter lethargy ahead of the return of the money managers from the late summer vacations in the Hamptons -- where the real estate market has tumbled from what we hear. Along with Aspen. Aspen used to be the investment grade gems of the real estate market, i.e. it never lost value even in bad times. Apparently this time prices got too hot and they are actually losing a significant amount of market value, at least for Aspen.
ADP: 177k VS 170K vs 195K prior (revised up sharply from 179K--I guess Zandi has not yet perfected the matching correlation to the BLS jobs report). This really means nothing because it has no correlation. Even if it did it would mean nothing because the BLS is all made up, or should I say, adjusted up.
Japan: Still in its depression. Industrial production 0.0; Construction -10.9%
Finland: Trying to pay money directly to aid recipients and not tie it to benefits to see if that will encourage going back to work.
EU CPI: 0.2% VS 0.3% exp vs 0.2% prior
EU Unemployment: 10.1% vs 10.1% prior
Earnings beats: PANW (but guided lower); BOBE
Misses: HRB (T&B)
Canada Q2 GDP: -1.6%, worst since Q2 2009 (a banner year!). After a quarter of rebound from two negative quarters, Canada may double dip into recession again.
OTHER MARKETS
Bonds: 1.568% versus 1.57% 10 year. Still holding the consolidation pattern.
EUR/USD: 1.1133 vs 1.1143. Dollar continues its gains against the euro
USD/JPY: 103.45 vs 103.00. Dollar still on the rally against the yen
Oil: 45.99, -0.36. Having a bit of a test but nothing pattern damaging thus far.
Gold: 1310.90, -5.60. Gold is having a break from its consolidation pattern.
Okay, end of month, 2 days ahead of the August jobs report. ADP was a nonevent as it should be. No Fed speakers this morning; must be some kind of record for how long they have stayed quiet (less than 24 hours).
September brings fear. Fear of warnings from companies such as technology. Given the stock indices are sitting near highs but have somewhat stalled in that they cannot put together a big break higher, that is another worry added to the market: seasonal weakness when markets cannot push higher and appear to be losing momentum.
Money can move at month ends and beginnings and that can give some false moves. For us we will execute the same plan, i.e. mind positions more aggressively even if the trend is higher, yet still seek opportunity.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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