Futures vs FV: SP -15.28; DJ -114.20; NASDAQ -31.13
Futures gapped lower early session and have mostly traded in a range though they are rising toward the top of the range toward the open.
The election of all things is now being blamed for the selling. First it was up because Trump was lower; not because Clinton was higher. An interesting way of putting it. Now it is because of the press talking of a democrat sweep that it is supposedly down.
Couldn't be the economy and that it is tailing off. Or that earnings, what truly drives stock prices, are coming in thus far vastly disappointing with many warnings that are 'shocking' as some are putting it.
Couldn't be China could it?
China exports: -10% versus -3.3% expected. China's economy is struggling again so the PBOC floods more yuan into the world for liquidity purposes. I recall China saying at the G8 meetings it was all grown up now and would not do that. I guess it had its fingers crossed behind its back or just wondered how gullible we could be over here.
The information disseminated (misinformation?) is fascinating. A Harvard representative on CNBC still talks of a skills gap in the workforce yet there are tens upon tens of thousands of US STEM graduates unable to find work in the US. Yet we need more and more visas to let STEM workers in. You have to ask, but no one did, why are colleges that have surged tuition prices, flooded with students with low interest loans in the billions upon billions of dollars, HAVE FAILED to produce the skilled workers we so desperately need? Fail.
Imports: -1.1% year/year vs -2.2% prior. 26 months of declines.
US fires cruise missiles into Yemen. Continual wars. Hope we all are ready for that.
Earnings beats: CSX, TSM
Misses: DAL (top line)
AMZN hiring 120K seasonal workers.
DB: Hiring Freeze. Oh great, that is the usual sequence when a bank starts to fail.
OTHER MARKETS
Bonds: 1.753% vs 1.77%
EUR/USD: 1.1032 VS 1.1010
USD/JPY: 103.74 vs 104.295. Dollar off on weaker data
Oil: 50.25, +0.07. Was lower but has reversed even with API reports showing +2.7M bbl versus -7.6M bbl prior
Gold: 1259.70, +5.90. World tumult modestly boosting gold from its selling.
Okay so we had Tuesday weakness, a not even half-hearted attempt Wednesday at recovery, and now a Thursday that is opening significantly lower. Oh no, this cannot happen so close to the election as it will impact the Fed's impartiality. Hence the new spin it is a sweep that is causing the market to fall, not the economy, not any other issues. Clever people.
Stocks are set to continue the break lower by the NYSE indices. The key is the September lows hit on that massive Friday tank and whether they hold are breached. Of course even on a breach you have to see if it was a false break that sends buyers back. Oh, and the Fed and its useful other foreign central banks could use that breach, as in February, as a buying opportunity.
Watching NASDAQ and SOX try to hold support will be key.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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