Market Alert - Pre-Market

Futures vs FV: SP -5.12; DJ -38.28; NASDAQ -16.66

Dollar lower, oil higher, gold rallying again, stocks lower after again testing the top of the 5 week range. It would appear that the Donald's -- er, President Elect's -- magic touch with the markets has worn a bit thin after that Wednesday press conference that had to deal more with some kind of news (today everything has to be viewed with the question 'is it fake?') about his personal life than with policies. On top of that, Trump started 'negotiations' with pharma prices for the government in typical 'Art of the Deal' fashion. The market gyrated up and down after that, closing higher. Today it opens lower.

AMZN: Announces 100K+ new jobs over the next 18 months. Bezos does not like/agree with Trump, but he is shrewd. He is getting out in front of any possible questions directed to AMZN by announcing full-time jobs with benefits in the US, basically telling Trump ahead of time to look elsewhere. Good for AMZN in growing, good for creating US jobs, good for Trump for getting companies thinking about US jobs (though Amazon would have done what it is doing regardless).


Oil: EIA reports a substantial build but oil is up anyway. Lower dollar helping it hold prices after failing the breakout.


Jobless claims (yawn): 247K vs 255K exp vs 237K prior


Import Prices Dec: +0.4% vs -0.2% Nov, jumping on energy price increases. Year/year import prices are lower.

Export Prices: -0.2% vs -0.3% November


Downgrades: DIS to sell buy Pivotal. Good stock should recover from this. We will see.

Earnings:
DAL in line, increases guidance (CNBC says it beat top line)
TSM Beats
KBH misses bottom line (CNBC says the company beat. Is CNBC cheerleading or reporting?)


OTHER MARKETS
Bonds: 2.33% versus 2.365% 10 year

EUR/USD: 1.0653 VS 1.05982. Dollar falling.

USD/JPY: 114.389 vs 114.70

Oil: 53.17, +0.92

Gold: 1202.00, +5.40


Futures are off the early morning lows, trending higher toward the open, but still of course well below fair value. This will be a good test of the trading ranges.

As noted last night, the market is not breaking higher (outside of NASDAQ and a very few large cap stocks), but no one is willing to sell it. That futures are slowly recovering early losses indicates there is still that upward bias, that 'what else would we do but buy?' mentality in the market. We will see if that slow trend to recover early losses persists after the open.

Oil stocks are looking decent this morning with oil stronger. Oil is back over its breakout point so we will see if that holds and provides the group support. Still some good-looking patterns in that group.

All in all the market remains with a tired look in a 5 week lateral move at the highs and is going to be tested with a down open. They have room to give, however, as they moved up to the top of the range through Wednesday. Of course they are failing at the top of the range again, but that still does not mean this market breaks down because no one has stepped forward and really sold (other than Soros who bet against the market ever since the election; no wonder he looks so haggard in current pictures).

So, we tend our positions and look for upside breaks that hold decently; oil seems a likely candidate for us. I know, I know, not that exciting right now, but when this range ends the fireworks will come back to some degree and we will be in some good stocks to take advantage of that.




Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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