Market Alert - Pre-Market

Futures vs FV: SP -0.22; DJ +0,33; NASDAQ +1.49

US futures trended higher pre-market in an attempt to start higher for a second session. The data dump for the day hit and futures popped but then dropped. The data is mixed on the headlines, but as with the US data the past few years, the headlines mask the real story. So, the data was not that great. Should not futures then rally as this would suggest the Fed less likely than it is already less likely to hike rates next Wednesday? One might think so, but the mob is fickle as I quoted from 'Gladiator' a week back.

August Retail Sales: -0.3% vs -0.1% exp vs 0.1% July (from 0.0%).
+1.9% year/year, a 6 month low and in historical recession territory.

Ex-Autos: -0.1% vs _0.3% exp vs -0.4% July (from -0.3%). Stellar.

Control Group: -0.1% vs +0.5% expected vs -0.1% prior (from 0.0%)!! How wrong can they be? Hugely.

PPI: 0.0% VS 0.1% exp vs -0.4% July
CORE: 0.1% vs 0.1% exp vs -0.3% prior. YR/YR 1.0 vs 1.0 vs 0.7 prior


Philly Fed, Sept: 12.8 versus 0.0 vs 2.0 August. Improvement . . .

NY PMI (Epire State Manufacturing is the official name): -2.0 vs 0.0 exp vs -4.2 August. EVEN with every component lower on the month. Improved with components heading lower. Interesting math. Fuzzy math?

Industrial Prod, August: -0.4% vs -0.3% vs 0.6% (from 0.7%)

Capacity Utilization: 75.5 vs 74.7 exp vs 75.9 prior


OTHER MARKETS
Bonds: 1.71% versus 1.698%. Bonds initially rallied on the pile of economic data dumped on the market. Things change, however, and bonds sold, pushing the 10 year yield past where it was pre-data.

EUR/USD: 1.1252 versus 1.1253

USD/JPY: 102.429 vs 102.382

Oil: 43.89, +0.31

Gold: 1320.50, -5.50


Futures continue tailing off toward the open. Perhaps bad is bad after all regardless of what the Fed may or may not do? Nah. If the Fed stays easy the market likes it. BUT . . . at some point does the market say to itself you know, the Fed is not easing but economic data continues to bleed lower. No new stimulus, bleeding economy -- why rally stocks in that scenario? More stimulus!! Perhaps, but I seriously doubt the market is there yet.

This could be a watershed session, near term, if the upside futures are trashed and the market sells off on the day. That sets up the pre-FOMC second leg dip before the 'Fed is still easy and not hiking rates' rebound right before the FOMC result.



Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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