Market Alert - Pre-Market

Futures vs FV: SP -6.71; DJ -58.85; NASDAQ -18.29

Despite being lower, futures are off their morning lows. Asia is lower and US futures opened lower as well. about 1.5 hours ago they started rising off those lows, cutting the losses in half. The question is whether the momentum will continue post-bell.

The consensus (always a dangerous thing) is that concerns about world monetary policy, and of course primarily the US, is causing the market roil. The Fed is adding to the issues this morning.

Lockhart (Atlanta Fed) says the economy has sufficient momentum to sustainably achieve the Fed's monetary policy objectives but gave no specific timetable for rate hikes.

Brainard : Considered one of the more dovish on the FOMC, she ruffled feathers with the announcement of her unexpected speech today. Given she is a dove and this is the last day before the Fed's quiet time ahead of its September meeting, this is seen as a last shot to condition the markets for a September hike.

The market certainly has a long way to go to get to a September hike as the FFF contract is at 29% for a September move.

M&A: POT, AGU in a merger of equals. The stock prices are mostly yawning.

Japan PPI: -0.3% vs -0.1% prior; Year/year -3.6% vs -3.9% prior

Yuan: China sets lowest fix since late August.

Market Predictions: More go to the downside view, not much of a surprise. Predictions of a market crash are becoming more common. Marc Cuban has been predicting a market crash if Trump is elected. Today an economist from a brokerage I don't recognize said the market was going to crash before the election.

These are what I call non-prediction predictions: the calendar would itself is one where a pullback often occurs. Add to it the Fed and its big (in the market's view) decision on a 25BP September rate hike. A person can play the odds of a correction, make up a 'reason' for it, and if the seasonal patterns play out with the added spice of uncertainty/worry/reality about the Fed and rates, and you have your correction for the 'reason' you said. Sure you do.



OTHER MARKETS
Bonds:

EUR/USD: 1.1274 vs 1.1223

USD/JPY: 101.084 vs 102.676

Oil: 45.13, -0.75

Gold: 1328.90, -5.60


Futures remain muddled and the indices are headed toward a downside open. Again, the first question is whether the late morning momentum pushes stock prices up off a lower open. Bigger picture, any bounce is just a bounce given the strength of the Friday selling. We will see how stocks recover, if they can recover, and use that accordingly.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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