Market Alert - Pre-Market

Futures vs FV: SP +5.75; DJ +53.55; NASDAQ +11.33

Amazing. Frankly it is hard to believe. 'Shocking' some are saying. Yes, all morning and NO mention of DB on the financial stations. What will an investor do?

Another day and of course another direction. Futures are up and as there is no 'that's it!' story to explain why most are saying it is because oil is up. Sure, we can go with that. 5 points on the SP500 futures doesn't really matter all that much.

The Fed of course is talking as is the ECB
Evans: He is "fine" with a December hike IF the data remains "firm." Any particular data in mind because a good portion of it is anything but firm. Must be Lacker's employment and inflation indicators from Tuesday when Lacker said basically the same thing as Evans. All on board now after 3 dissents? Oh, all but Yellen.

ECB: Talking taper and that has Europe rattled. Not much

EU data:
Retail sales, Aug: -0.1% vs -0.3% exp vs 0.3% prior. Year/year 0.6% vs 1.5% expected and 1.8% prior. Talk about a big year/year miss.

EU Markit PMI: 52.6 vs 52.9 prior. Lowest since 1/2015.

ADP: 154k VS 171K exp vs 175K prior (from 177K). This is the Michigan Sentiment preliminary report of jobs reports, i.e. it means nothing.


OTHER MARKETS
Bonds: 1.697% versus 1.69%

EUR/USD: 1.1209 vs 1.1204

USD/JPY: 103.06 VS 102.889

Oil: 49.62, +0.93. Still solid as inventories take a surprise drop.

Gold: 1274.00, +4.30. Modest rebound after a 43 point meltdown.


Stocks are set to recover some lost ground from Tuesday in a continuing but toned down version of the prior volatility that arose around DB's woes last week. Today there is more a worry about the Fed getting back to hiking talk. That shows you how quickly DB was forgotten. After all, if DB was in trouble, how could the all-knowing Fed even consider a rate hike? Surely all is going just fine. Everywhere.

Then again, that doesn't matter that much until it matters right? That is how this market works: issues can be quickly forgotten when you have central banks and a Fed still absurdly lenient with monetary policy.

With that background, still looking at positions as they show themselves even if the trends have not merged. Thus far the sellers had their shot in the volatility and have failed to follow through. That makes today somewhat important given the Tuesday selling: if the sellers want to take their shots they will have a higher open to shoot at. Just doesn't feel that way today in talking with floor traders and some on the desks at the big funds, but we will see how the early bounce plays its hand.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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