Market Alert - Pre-Market

Futures vs FV: SP +0.25; DJ +7.84; NASDAQ +0.68

Futures are up and down a bit, trading near the bottom of the morning range toward the open. For a market that is driven by perception, whether a 'phenomenal' tax plan or the ability of the administration to govern, it is all about the stories coming out. The stories last night and this morning are not as 'nirvana'-inducing as it was just 12 hours ago.

National Security Advisor Kelly resigns because he did talk with Russia pre-inauguration about sanctions and the hid details of the conversation from VP Pence. He resigned and he should have. If not, he should have been fired.

Kim jung--un's older half brother killed in Malaysia. Some say in retaliation to the missile launch while others note he was an outspoken critic of his half-brother's strict (that is an understatement) regime. It matters because you don't know how that wingnut will respond.

PPI, Jan: 0.6% vs 0.3% expected. Largest mo/mo spike since 9/12.
Core: 0.4%. year/year 1.2%

EU GDP Q4: 0.4% vs 0.5% exp vs 0.6% prior. Annual 1.7% vs 1.8%

Fed: This is a big one as Yellen heads to DC to talk to Congress in her testimony formerly known as Humphrey-Hawkins. No one really knows what she thinks. The Fed is so transparent you cannot see anything and thus the market doesn't really know what to think.

Lacker provided some 'clarity' this morning saying a rate hike sooner than later was better than one later versus sooner because you might have to really act later if you don't act sooner. Clear, right?


OTHER MARKETS
Bonds: 2.44% versus 2.43%

EUR/USD: 1.0631 VS 1.0603

USD/JPY: 113.386 VS 113.634

Oil: 53.63, +0.70. Up as supply is claimed to be pared as part of the OPEC production cuts.

Gold: 1234.28, +8.40. Bouncing back.

Futures are heading lower into the open, the opposite of Monday. Despite the phenomenal announcement on taxes still to come, the market moved very quickly to the upside, and this news feed is back to more of the worry about whether the new administration is up to the task. Oh, it is for sure, it is just under a microscope that previous admins did not have. But that is the way it is in DC.

Will see how far this weakness at the open goes.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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