Market Alert - Pre-Market

Futures vs FV: SP +9.00; DJ +75.58; NASDAQ +19.38

Post-Italian vote European stocks were tanking. Then, just before the European markets' open, another reversal. One commentator put it this way: Brexit took 3 days to get over, Trump 3 hours, Italy 3 minutes. Some spin the vote as pro-EU, others as anti-EU. The truth: Italy wants to leave, needs to leave (horrible unemployment), will leave. Next up: France, Austria.

Not a lot of other news in terms of the economy. Oh, Trump created another tempest in a teapot with another tweet regarding China. After years of bowing to China it is tough for the media to handle stronger talk. Said it last week, there is a new sheriff in town. Happens every 4 to 8 years in the US. The rest of the world still has a hard time adjusting to that, or should I say the US media has a hard time adjusting.

Fed: Dudley comments that he favors gradual rate hikes if the economy shows the same activity it is showing. Stop the presses. We have NEVER heard Dudley or any other Fed official say that before.

EU retail sales: 1.1% vs 0.8% exp vs -0.4% prior. +2.4% year/year vs 1.7 exp vs 1.0 prior. Europe doesn't look any weaker than the US does it?


OTHER MARKETS
Bonds: 2.432% vs 2.394%

EUR/USD: 1.0703 VS 1.0670. Euro surging post-Italy vote

USD/JPY: 114.27 VS 113.533

Oil: 52.17, +0.49

Gold: 1167.20, -10.60. Sure doesn't seem worried about Italian vote.


Futures are a bit off morning highs but are for the most part easily holding their gains. Thus an upside gap is on for the open and it would appear the market pullback that started last week is trying to end. Certainly the NYSE indices are in pullbacks to near support that set up new moves (RUTX, SP400, SP500 sort of).

The question is whether NASDAQ and SOX are coming along to the upside and if they do, can they hold it? There are some set up to move as the plays on the report show. We will see if they can hold onto the early moves and if they look solid, you have to go with what they are showing. It is concerning there was such a sharp drop and no real time to set up again, but sometimes a single sharp move is easier to overcome. Again, we will see if they hold their moves.




Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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