Market Alert - Pre-Market

Futures vs FV: SP -4.12; DJ -35.48; NASDAQ -9.22

Sluggish pre-market as the FOMC starts day one of a 2-day meeting where it is assumed the Fed will raise rates 25BP. It has reason to do so based upon the morning's data.

PPI, February: 0.3% vs 0.1% expected vs 0.6% Jan

Core: 0.3% vs 0.2% prior vs 0.4% Jan

Final Demand: +2.2% year/year, highest since 3/21012


China: Retail Sales 9.5% vs 10.5% exp vs 10.9% prior
China Industrial Production: 6.3% vs 6.2% exp vs 6.0% prior


Oil: OPEC production down in February as Saudi Arabia cut its production more. The US industry says 'thank you.'


Healthcare: GS warns the CBO report could delay healthcare reform to May or later, thus delaying tax reform.

CBO report says 14M will lose healthcare and the headlines talk of 'cruel republicans' taking away insurance. First, the insurance is not good insurance; chronicled that many times over -- way, way, way too costly for most to use it after paying premiums. Second, 10M of the 14M will no longer be required to buy it. That means a lot of young people won't buy because historically young people don't buy major healthcare. Then 3M are on Medicaid and the report assumes they won't find insurance from what could now be cheaper sources. AS USUAL, any change that promotes freer markets is styled as crushing the poor, the old, etc. Markets work. Repeat, markets work.


Earnings beats: DSW; TLYS

Upgrades: DIS. About time. Now can it do something please.


OTHER MARKETS
BONDS: 2.608% vs 2.617%

EUR/USD: 1.0629 VS 1.0653

USD/JPY: 114.89 VS 114.86

Oil: 47.70, -0.7. Oil has struggled ever since last week's inventory data. API is out tonight, EIA on Wednesday morning.

Gold: 1203.50, +0.40


Futures are up off the morning lows but not surging toward the open. They improved after the OPEC production cut report. Oil stocks were near term sold out and ready to bounce and it looks as if they are going to make an attempt given this news. Of course they are not carrying the rest of the market with them.

SOX has led of late, NASDAQ trying to follow. Will see if they hold the line while the market struggles to start this session. Recalling the index positioning, modest bounces Friday and Monday off the post-SOTU pullback. They have a bit of downside to give and still hold the pullback, but at some point in this range the bids need to return. Again, SOX is important as it usually leads.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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