Market Alert - Pre-Market

Futures vs FV: SP +3.29; DJ +58.90; NASDAQ +11.90

Global stocks are higher after the US post-Fed rally and on the Dutch populist candidate clearly losing in the election. All in the status quo must be okay, with the exception of Trump, and the establishment is working on that.

Bonds rallied (but are off some today), gold is surging, dollar is lower again. The markets are acting as if they feel the Fed was not as hawkish as they thought, or the Fed is hiking into a weakening economy.

The latter was evidenced by a Bloomberg reporter actually asking why the Fed is hiking when the data it looks at is fading fast. Yellen blamed 'noise' in GDP data and reiterated that the Fed forecasts were the true standard by which to measure the US economic future. Oh, I see -- it is the Fed's opinions that are accurate, not the data. Cool. I am relieved.


Housing Starts, Feb: +3% as single family rose 6.5% while multi-family fell 7.7%. That is normal in a housing recovery. Finally.

Permits: -6.2%. Hmmm. All is well?


Philly Fed, March: 32.8 vs 25.0 exp vs 43.3 prior.

Prices surged, New orders flat.


Trump Budget: Defense +54B, cuts to HUD, foreign aid, EPA. Exactly what he said he would do.


Fed: GS says the market rally is NOT what the Fed wanted as a result of its rate hike. Oh the absurdity of a small group of people who think they are smarter than markets and try to set global rates for money, bonds, etc. It is fraught with problems in perception and of course economic reality. Again, reduce the Fed's mandate to only providing liquidity when certain criteria is met and then only for a know, finite period. A short, finite period. Then markets might just work and recover quickly.


OTHER MARKETS
Bonds: 2.528% vs 2.502%. After rallying on the FOMC rate hike, bonds are coming back some, giving up some of the gains.

EUR/USD: 1.0733 vs 1.0732. Euro holding its post-FOMC gains as the Dutch election rejects the populist candidate

USD/JPY: 113.31 vs 113.447. Dollar continues to weaken against the yen as currency markets expected a more hawkish Fed.

Oil: 48.98, +0.12

Gold: 1231.00, +30.30. Gold surging back on, again, a perceived less hawkish Fed and perhaps worries about economics.


Stocks are holding gains but are off the highs. A flat pre-market, flat all morning. That is a target for sellers to shoot at. Ha ha ha ha ha ha ha! Sorry, the thought of sellers in the market was just too much. Hey, we will see if they actually take a shot after the 'big' news from the FOMC.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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