Market Alert - Pre-Market

Futures vs FV: SP +6.78; DJ +68.91; NASDAQ +31.73

AAPL earnings providing some backbone for the indices, particularly NASDAQ and DJ30. Major component of both and the company now holds a quarter trillion $. Hey Tim Cook, can you spare $10M? I have a hot stock tip . . .

FOMC day: The first for President Trump. The first voting meeting for Evans (he has voted before), Harker, Kaplan, Kashkari. The latter 3 have not voted before. No rate change is expected, but anticipate a more 'confident' Fed in terms of its rate hiking. Granted that would not take much given the quivering tower of Jello it has embodied the past several years.

Glad that the Fed is confident. According to Harry Dent, who called the 1980's, 1990's and 2000's booms, US citizens (and presumably the world?) are heading into the worst 3 years of their lives and for sure this century in terms of asset valuations. For reference he cites Great Depression, early 1970's stock crashes. How bad? 70% to 90% reduction in stock values. The upside: protect your capital and you will have the buying opportunities of a lifetime, maybe two.

Earnings: Just beats to report today
AAPL, CB, APC (TL, BL in line), ANTM, EA, AMD. Nicer after the Tuesday basket of misses.

PMI's: US is out at 10:00ET
China: 51.3 vs 51.4 prior
Japan: 52.7 vs 52.8 prior (Those currency manipulating rascals)
EU: 55.2 vs 55.1 prior
Germany (Another currency manipulating rascal): 56.8 vs 56.1 prior
UK: 55.9 vs 56.1 prior

Mortgage apps: -3.2%

Nukes: Iran fires a ballistic missile. CNBC reports that 'presumably' violates the Iran nuclear deal. I think this is just the latest, albeit most egregious, of many violations. Face it, there is no Iran nuclear deal. Oh, I GET IT. It is the same kind of deal we got with Canada and Mexico in NAFTA under which the US gets the shaft and has lost a clearly defined minimum of 1M jobs to Mexico alone. The same kind of deal we got in the TPP. Bad deals, which are sadly, the norm for the deals the US has struck.

Okay, back on track now.

OTHER MARKETS
Bonds: 2.487% vs 2.44% 10 year. Bonds selling after the uncertainty bounce Monday and Tuesday.

EUR/USD: 1.0774 vs 1.0791

USD/JPY: 113.47 VS 112.98

Oil: 53.28, +0.47

Gold: 1208.60, -2.80. Giving back some of the gains made on the Trump EO's.

Futures are solidly higher and holding the gains for the past three hours. Would prefer to see strengthening into the open versus this static level. That means stocks gap higher, but is there any more strength to not only gap but to continue higher?

As a reminder, we plan on using this as an exiting rally, watching how the indices move back up and how they react to the recent highs hit as they gapped higher last Wednesday. Hmmm. Another Wednesday, another gap upside.

Anyway, watching how they react to those prior highs and if they show lots of strength and blow right through, great. If they stall, if the move up to that point is on low volume and narrow breadth, we at least lighten up positions.

New positions? Yes, yes, the China stocks still look very good and now after the Trump meeting with drug makers Tuesday, biotechs, medical appliances and others don't look bad. We can pick up some positions in those because they were strong during the selling. The FAANG fit that characterization as well. So, we will look at new positions selectively (as you always should, right?) and if they show the moves we can put some money to work there, STILL KNOWING that if they get to the prior highs and stall we will have to pare the positions.



Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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