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Monday, April 24, 2017

Market Alert - Pre-Market

Futures vs FV: SP +27.44; DJ +219.24; NASDAQ +60.70

French elections are viewed as best possible market outcome as the communist is out, Le Pen faces what is considered a conservative candidate that is hard to beat (Marcon). Markets around the world are higher or ready to trade higher.


100 days: This week markets Trump's first 100 days, days marked by executive orders for agencies to study how to change things. In short, not a lot of change yet.

Also, tax reform and the big announcement to come this week was toned down over the weekend as providing 'broach principles' the administration wants to accomplish. Reports are the President has not decided if he wants the plan deficit neutral or not. More of the same.


Shut down: beyond the euphoria today, remember this is also government budget week and there is the specter of a shut down hanging out at the edges of the market's sight. Trump wants a wall in the budget, the democrats do not, Trump possibly offering a dollar for ACA subsidies for every dollar for the wall. That will be an interesting negotiation.


Oil: flattish after dumping last week. Lundberg survey says gasoline prices rose 0.03 last wee to 2.46/gallon national average.


Beats: HAS, HAL

Misses: KMT (TL)

40% of the S&P market cap reports this week in the season's biggest week.


OTHER MARKETS
Bonds: 2.295% vs 2.236%. Bonds fade some of the rally as the French election is in the bag, at least according to the market reactions.

EUR/USD: 1.0859 vs 1.07258. Dollar off, euro up

USD/JPY: 110.142 vs 109.00. Dollar back up after the uncertainty drove to the yen.

Oil: 46.95, +0.03

Gold: 1271.60, -17.50. Losing some of the worry trade


Futures are mostly holding their gains that were built in as soon as they started trading. French election has surged Europe, and of course the elections are more important to European markets than US, but the US likes the certainty and the result.

The question is whether the sellers try to take some shots at the rally. They have done that the past few weeks. They still only managed something of a pullback in the large indices, but they are out there pushing here and there. As noted earlier, the potential for a budget impasse is there and shutdown is a possibility. That may weigh on the rally, but it is not likely to disrupt it today.

Do you chase the gap? Not for most stocks Many have some recovering to do from the 8 weeks of lateral and lower market movement. You let them recover of course. Many are just rebounding from patterns you don't want to buy.

Our interest is in those stocks that held or formed good patterns during those 8 weeks. Those represent the buys we want to look at while we let positions such as AMZN et al rally for us as well.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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