Market Alert - Pre-Market

Futures vs FV: SP -2.23; DJ -18.03; NASDAQ +4.21

Again NASDAQ leads but it is all relative. The gains were trying to mirror Monday early on with futures gapping upside. As the open approaches, the futures are whittling their gains to flat to slightly negative on NYSE, still positive on NASDAQ.

Mergers give way to earnings and Fed action. Earnings are doing pretty darn well but a theme is appearing. The Fed is just being the Fed.

Earnings: Plenty of beats on top and bottom line. But a theme is appearing and that is pessimism about the future. Maybe sandbagging, maybe overcautious, but they are warning: UA, CAT, DD, MMM, V and on and on

Beats: GM, MMM, GLW, MRK, DD, PG, UTX, V, RMBS, ZION, UA

Misses: LLY (T&B), CAT (T&B), SONC (TL), BHI (TL), WHR (T&B)


Fed: Evans is emphatic that December needs a rate hike and indeed, 2017 will have 3, count 'em 3, rate hikes (4 total). Of course, Evans said almost a year ago that 2016 would have 4 rate hikes. On this strong endorsement of rate hikes, the December potential surged to 70% from 69%.


Jobs: TWTR laying off 20% (300 jobs)


Yuan: New 2016 low versus dollar, but the PBOC says 'no persistent' yuan devaluation. Whew, was getting worried that China was manipulating its currency.


OTHER MARKETS
Bonds: 1.77% vs 1.76% 10 year

EUR/USD: 1.0859 vs 1.0873

USD/JPY: 104.56 vs 104.33

Oil: 50.23, -0.29

Gold: 1268.50, +4.80. Up, but off its earlier highs


Futures are mush ahead of the open, giving up the morning gains on the earnings, German business confidence (oh yes, it was up again -- confident that the economy won't spiral into the abyss), and perhaps the Fed hiking rates?

We will see if this pullback provides some upside entries. NVDA is up a bit pre-market; would like a pullback, may get it as futures continue lower toward the bell.

If there is a pullback it might give the bids a chance to return. Monday was solid on SOX, NASDAQ, and the NYSE indices didn't totally roll over. Now perhaps they are going to do that today as they have done frequently after testing the 50 day EMA resistance, but not assuming that given the action Monday was overall decent and there is still plenty of leadership groups.



Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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