Market Alert - Pre-Market

Futures vs FV: SP -8.11; DJ -71.23; NASDAQ -23.19

Earnings rightly take their place at the fore of stock pricing, and despite a series of top and bottom line beats, futures are low. AAPL effect? Its forecast for holiday sales was not encouraging and it suffered its first revenue decline in 15 years despite the Samsung issues. When a company starts a revenue decline that is always worrisome. One quarter doesn't make a trend, but is noteworthy. Smart phone saturation? AAPL has killed the car, killed the TV, killed just about every new project it had. It is a cash cow for sure but without Jobs it has an innovation deficit. But, I digress.

Earnings: No guidance issues today outside of AAPL

Earnings beats: KO, BA, BIIB, CMCSA, GRMN, PNRA (the bread is rising), GNRC, JNPR, AKAM

Misses: AAPL (TL, weak guidance), CMG, LUV (TL), P (BL, TL)

Wholesale Inventories, Sept: 0.2% mo/mo, 0.0% year/year (first yr/yr decline since 6/2010). Vehicles +9.0% mo/mo as car sales slow rather dramatically.

China: Swapping US Treasuries for Japanese bonds. January to August it bought $86.6B in Japanese bonds while it sold roughly the same amount of US Treasuries during that time.


OTHER MARETS
Bonds: 1.781% versus 1.76%

EUR/USD: 1.0923 vs 1.0886

USD/JPY: 104.33 vs 104.211

Oil: 49.10, -0.86. API inventories jumped 4.8M, gasoline +1.7M. EIA still to come this morning.

Gold: 1272.90, -0.70


Futures are off the lows but are basically in the same relative positive all morning. Not massive losses but adding to the Tuesday fade. The subpar NYSE performance continues even in the face of some overall good earnings. Ah, but beating expectations does not mean they are getting better, now does it? Lowered expectations, beat them, excitement generated, then overall earnings are still falling. That is why you see individual stocks jump or dump on earnings and the NYSE indices still struggling.

At least there is NASDAQ and SOX. We will see if they hold up (they likely will), and if that generates upside off the lower open. Could very well be that the NYSE indices will test the bottom of the September/October range again.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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