Market Alert - Pre-Market

Futures vs FV: SP +7.63; DJ +53.55 NASDAQ +14.5

Things have calmed from the spooky Thursday but the same issues are facing the banking industry as Europe deals with the initial headwinds of its banking crisis.

DB continues lower but has recovered some early losses.

Commerze Bank already announced a 20% workforce layoff and now others are set to do the same.

ING (Dutch) is said to announce a layoff 10,000ish Monday at its shareholders' meeting.

Big funds are already pulling 'excess' funds from DB. A fuzzy term isn't it? I read this as 'excess' meaning 'all.' DB is also a big retail bank. If individuals start to run it could be ugly. So far, however, not he case and that is good.

Personal Y, August: 0.2% vs 0.2% exp vs 0.4% July

Personal Spending, Aug: 0.0% vs 0.2% exp vs 0.4% July (from 0.3%)

Consumption: 0.0% vs 0.1% expected

Income breakdown: $13.3B from wages, $10B from transfer payments (welfare, Medicaid, etc.)

Spending down mostly on auto sales.


EU Unemployment: 10.1% vs 10.0 exp vs 10.0 prior


OTHER MARKETS
Bonds: 1.548% versus 1.56%

EUR/USD: 1.1167 vs 1.1218

USD/JPY: 101.17 vs 101.143

Oil: 47.92, +0.09

Gold: 1330.90, +4.90


Futures are holding a steady increase since the early morning and trade near pre-market highs. Again, settling down after the Thursday worries. Our plan, even though it is Friday and there is risk on any positions entered ahead of a weekend given the day to day volatility, is to let some of these downside plays recover on the early rise, e.g. DIA, SPY, and then look at beginning to pick up a few contracts in the puts. Those indices look overall weaker and working into a bit more hedging there given this volatility at the prior highs is historically a good call.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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