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Friday, September 23, 2016

Market Alert - Pre-Market

Futures vs FV: SP -4.58; DJ -14.46; NASDAQ -4.76

Markets are retrenching some after a post-FOMC jump. Modest losses, however, and futures are recovering some lost ground toward the open. No scheduled US reports and the news is pretty much company specific. After information overload, the market is pausing to take a breath on a light news day.

Oil: S. Arabia offers to cap production if Iran agrees to freeze its output. Iran quickly responded with a less than polite 'no.'

M&A: It is reported GOOG and CRM are considering offers for TWTR. TWTR is up 18% pre-market. Hey, something finally moved the stock!

FB: WSJ reports that FB admits for 2 years it overstated the amount of time video ads were viewed by up to 80%. Supposedly that has been rectified, but not for those that spent money on those ads.

AAPL: Japan is said to be mulling antitrust action.

EU PMI: 52.6 vs 51.5 vs 51.7 prior
Services: 52.1 vs 52.8 exp vs 52.8 prior


OTHER MARKETS
Bonds: 1.613% versus 1.625% 10 year

EUR/USD: 1.1212 vs 1.1207

USD/JPY: 100.586 vs 100.774

Oil: 45.98, -0.34

Gold: 1340.60, -4.10


The US stock market has enjoyed a 2-day rally on the FOMC's inability to raise rates. Now the markets have to think about what comes next week, and the item getting the most print and air time is the first presidential debate. It is going to be just Trump and Clinton, though I think Johnson should be there as he is pulling 10% in many states. Oh well.

Anyway, there is the idea that a Trump win is bad for markets and the theory is that if Trump does well the stock market does not in the debate aftermath. Who knows about those short-term gyrations? Trends tend to stay in place without substantive change, and after the 1980 election where Reagan was said to promote 'voodoo' economics, it became apparent that his ideas worked. Thus I don't take too much stock in those kind of predictions, particularly when Clinton's economic plans are to levy even more taxes than those already crushing the small businesses.

So, near term today is soft at the open, but not that soft. Bids could easily return after some giveback of the Wednesday/Thursday post-FOMC gains. Watching SOX' performance, but that will be a multi-day event as to whether its heavy look starts to act as a drag.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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