Futures vs FV: SP +1.16; DJ +6.86; NADSAQ -0.72
Yellen gives Congress testimony later, text is out, says a rate hike is "appropriate relatively soon." Oh great sage . . .
Japan: Starts its management of the bond curve by purchasing Japanese government bonds. Okay, here we go . . .
US Treasuries: Foreign holdings below 2012 levels as China sells to help keep money at home given the outflows. Saudi Arabia sells to raise money as oil prices have really hurt with its ambitious domestic spending plans.
CPI: 0.4 VS 0.4 VS 0.3. Six month high
Core: 0.1 vs 0.2 vs 0.1. Year/year 2.1%. Over 2% for 12 months now.
Energy +3.3% mo/mo. Rents +3.3% year/year.
Housing Starts: +25.5%, rising across the board. The weak numbers give way to an outlier surge, but it is a surge indeed.
Philly Fed: 7.6 vs 7.0 exp vs 9.7 prior.
Employment down for tenth month. Outlook at a 9 month low. Prices paid the highest since 7/2014. Some are saying this smells like stagflation. Been there, done that. Not good.
Earnings beats: BBY; LB; CSCO
Misses: WMT (TO); SJM (TL); SPLS (TL); NTAP (TL). An old, familiar story in this economy.
OTHER MARKETS
Bonds: 2.242% vs 2.219%
EUR/USD: 1.0692 VS 1.0726. Dollar off as BOJ's actions have roiled the markets some.
USD/JPY: 109.522 vs 109.07. Dollar up some as BOJ starts its yield curve management work.
Oil: 46.10, +0.53. Up even with the announcement of another recoverable 11B bbl in West Texas.
Gold: 1224.50, +0.60. Going nowhere fast.
Stocks are set to open about flat line as futures continue their recovery into the opening bell. Hard to keep the market lower, but looks like another session, at least to start, of consolidation after the run. No real test yet by DJ30, RUTX, SP400, the leaders in the move, but they are holding gains as they pause. SOX is powering ahead. Thus far there is rotation, but there had been darn little give back from the leadership groups. Looking for some such as CMI to see if they start back up.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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