Market Alert - Pre-Market

Futures vs FV: SP -15.04; DJ -120.07; NASDAQ -23.75

I thought all Fed questions were settled after Brainard's 'the economy is not nearly as great as we said therefore rate hikes are premature' Monday speech. The headlines this morning, starting with Reuters, state that futures are lower because investors are still assessing "rate hike chances." With GS cutting its view of a September hike to 25% (FFF contract shows 29%), why is anyone worried about a hike? Further, the WSJ's Hilsenrath says the FOMC bifurcation means the Fed stands pat in September. Again, what is the fuss? Could it be, perhaps, something else other than the Fed following?

Oh, it is also oil we are told. The EIA now states that the oil glut will last into "late 2017" thanks to "dramatic deceleration in China and India" as well as "vanishing growth" in developing countries. So, oil is lower and as we are told there is an umbilical cord between stocks and oil, so are stocks. Glad that is settled.

Oil may be a bit of a new wrinkle with the EIA extending its 'glut' forecast through most of 2017, but the Fed 'to hike or not to hike, that is the question' debate is nothing new, not close.

Regardless of the 'pin the tail on the reason for the selling' contest, futures are lower after screaming back upside Monday following a hair on fire, screaming selloff Friday. Stocks are set to open lower as futures trade near the morning lows.


M&A: RNECF buying ISIL. Another stock we liked to trade is gone . . .


China: August retail sales +10.6% versus 10.2% prior (year/year). Doesn't SEEM like a dramatic deceleration. Fixed investment 8.1% year/year; wish the US had that.


Analysts: WDC upgraded. NFLX downgraded.


OTHER MARKETS
Bonds: 1.67% versus 1.671% 10 year

EUR/USD: 1.1229 VS 1.1234

USD/JPY:

Oil: 45.39, -0.90. Well off the morning lows down over 1.25

Gold: 1329.00, +3.40


Futures stumbling along the lows of the pre-market session. Will there be another miraculous lift as on Monday? Futures are not rising into the open as on Monday, so if it happens it will have to come later in the session.

The problem with this open is it will be significant downside and that makes it harder to get into downside positions as they gap, but not impossible. The market is showing more day to day volatility with now a gap lower on the heels of the surge. That volatility at highs suggests continued weakness and again we will look for decent entries.



Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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