Market Alert - Pre-Market

Futures vs FV: SP +6.3; DJ +34.49; SP +19.62

Futures are off their morning highs but are still holding gains as the market starts a new month. The upside bias continues even after the SP500, DJ30 moved laterally into the weekend. The break higher was solid, the test is good, now we are waiting for those indices, along with SP400, RUTX, to break higher again.

Lots of news this week from today's personal income and spending to the FOMC rate decision Wednesday, jobs on Friday, Yellen speaking later Friday, then the French elections on Sunday. Oh, and there is, again, talk of a healthcare vote this week, but the republicans are flogging at a dead horse. The Freedom Caucus has enough changes to support the new version but the moderates don't like the changes. The whole thing needs to be scrapped (along with Paul Ryan) and get together and get a real bill everyone can live with. Just my random thoughts on the matter.

Spending, March: 0.0% vs 0.1% exp vs 0.0$ prior (from 0.1%)

Income: 0.2% vs 0.3% expected vs 0.3% Feb (from 0.4%)

Real spending (inflation adjusted): 0.3%

Mo/mo spending back at December 2014 levels, and that is not good, being well, well off the 2016 highs. Well off.

PCE: -0.2%, +1.8% YEAR/YEAR

Core PCE: -0.1%, +1.6% year/year


OTHER MARKETS
Bonds: 2.289% versus 2.28% 10 year

Oil: 48.96, -0.37

Gold: 1265.30, -3.20

EUR/USD: 1.0908

USD/JPY: 111.723


Okay, so last week showed the break higher then a test Wednesday to Friday depending upon the index (NASDAQ rallied through Thursday). More earnings of course, more economic and world data, but the market has worked through 2 months of lateral and lower testing, broke higher, made or is making the initial test. Now you again look for stocks that are making breaks higher out of good patterns as that is how the market rally gets its next legs.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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