Market Alert - Pre-Market

Futures vs FV: SP -0.32; DJ -29.01; NASDAQ +3.42

It is always dodgy when political news dominates the headlines versus economic news. Of course right now political news is economic as the President's tax agenda is hostage to the healthcare bill that supposedly has to be passed first in order to take on taxes.

As of now the bill is set for the Thursday vote but the votes are not there at the moment. Sausage making at its finest and it is always amazing to me how the electorate is so shocked at how this works. It is politics; everyone wants something for their district or themselves. Deals are made, last minute calls. It happens this way all the time. Remember the Cornhusker deal to get the ACA passed? Likely the bill passes by a close vote then goes to the Senate for major changes and where again the same 'it will never pass' meme will prevail. It may not make it, but every major bill works this way.

Earnings:

NKE TL miss, world future orders are lower. From grand to what happened.

FedEx BL miss, but it has a great outlook. Explains the miss as a large customer not shipping as much over the holidays and FedEx loaded up in anticipation of a big season. Oops.

WGO (motor homes) beats. Things cannot be THAT bad if buying motorhomes is up.

Retail: BEBE is closing all physical stores to concentrate on on-line sales. The direction of retail becomes clearer. Dollar priced stores will dominate, some discounters, some boutiques, then everything else online.

Existing Home Sales at 10:00ET.


OTHER MARKETS
Bonds: 2.407% vs 2.43%. Bonds continue to rally as tax cut future is in jeopardy.

EUR/USD: 1.0800 vs 1.0813. Dollar bounces back just a hair.

USD/JPY: 111.24 vs 111.792

Oil: 47.64, -0.60

Gold: 1248.80, +2.30


Politics moves through its grinder and takes the market with it. Futures are off the early morning lows but are at best sluggish, fading toward the open. The market weakness is not over because there is a Thursday vote that is still on for now (meaning they hope to get the votes). If that is cancelled, not good. If it is on the market remains on pins and needles and you will see the actual vote on CNBC, Fox Business, Bloomberg, etc.

We want to use strength to take some off the table. Unfortunately the futures are not that strong. Of course we will see how the leaders in chips, biotech, and others hold support.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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