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Friday, March 24, 2017

Market Alert - Pre-Market

Futures vs FV: SP +0.95; DJ +41.70; NASDAQ +3.56

Futures are trading at the morning highs, matching the overnight high last night after stocks bumped higher off a weak US close. Trending upside the past 2 hours as there is a bit of upside momentum as the market resets after Trump's ultimatum to the HOUSE to pass the proposed healthcare bill (a 'great' bill he says) or forget getting the ACA repealed for . . . now. A big showdown with one House republican whining 'is this a republic' when told what to vote for, when to vote, etc.? Yes it is. There are windows to act and you need to act. If you cannot get your 'stuff' together and get it done, that is tough. And, it is tough for the US people who are struggling under this. Still feel they will do something, but then it goes to the Senate for a few months. At least. Interesting political gambles taking place.


Durable Goods, Feb: 1.7% vs 1.3% exp vs 2.3% prior (from 1.8%.

Ex-transports: 0.4% vs 0.7% exp vs 0.2 (from -0.2)

Five years of flat, lateral movement in Durables. In 99-2000 that preceded a recession. Again in 2006-07.


EU PMI's: much better
Overall: 56.3 vs 55.3 vs 55.4 prior


Russia: Cuts rates unexpectedly


Outflows: BAC reports $-8.9B from equity funds, a 38 week high.


Beats: MU blows it out; KBH

Misses: FL (BL); GME (TL)


OTHER MARKETS

BONDS: 2.414% VS 2.41% 10 year

EUR/USD: 1.0807 vs 1.0770. Dollar sells again.

USD/JPY: 111.05 vs 111.359

Oil: 47.94, +0.24

Gold: 1248.30, -1.80


Semiconductors received a boost from MU earnings. The big decision today is whether to buy the strong moves in good sectors if they show the moves. Will there be a H/C vote and if so when? Likely after the market close so will a failed vote bust the move higher or will investors say 'fine, move onto tax reform'? Problem is, ACA repeal IS tax reform given the trillions in the Justice Roberts re-write from the bench to make mandates, etc. a tax (after the Obama administration argued it was NOT a tax; if there was ever a clear case of judicial activism . . .)

If there are good individual moves in those leading sectors (e.g. biotech/drugs, chips) we can pick up some positions. We lightened up problematic positions Thursday, just not wanting to babysit patterns damaged Tuesday that did not rebound well enough. If we see opportunity from great patterns, that works.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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