Market Alert - Pre-Market

Futures vs FV: SP +3.03; DJ +37.06; NASDAQ +8.47

Futures are working higher again, trading near session highs before the bell. All kinds of 'leaking' stories on the political side from Trump supposedly leaking sensitive information to the Russian ambassador to WikiLeaks communications reportedly on the computer of murdered DNC staffer Seth Rich. Recall, seems ages ago, WikiLeaks said the Russian DNC emails were leaked not hacked by Russians. Leaks everywhere. The Russian hysteria reminds me of the early 1980's when it was the Libyans. That reached a peak in the movie 'Back to the Future' with the famous Michael J. Fox line 'It's the Libyans!'

Leaks aside, there is news.


Housing Starts, April: -2.6% vs +3.7% expected vs -6.6% March. March was supposedly due to the weather. April was due to what, a weak economy?

Permits: -2.5% versus -3.4% prior (from -3.6%). Hey, at least March was not as negative. Much rejoicing. Yea.


Industrial Production: 1.0% vs 0.3% exp vs 0.4% (from 0.5% March)

Capacity Util: 76.7 vs 76.2 vs 76.1 March.

These are at least better numbers.


Jobs: F reportedly cutting 10% of its workforce. F will not comment on 'speculation.' Perhaps it should. Something called damage control. That would be a mere 20,000 people. Seems worth it to get out in front of that story. Unless . . . F is pulling a Disney and bringing in foreign workers. Nah. Just a reaction to a world STUFFED with car inventories.


Earnings beats: HD

Misses: SPLS (TL); TJX (TL); DKS (TL)

Did I mention yet today that retail remains in trouble, at least the traditional stores?



OTHER MARKETS
Bonds: 2.342% vs 2.34%. Jumped to 2.350% but has backed off as bonds recovered.

EUR/USD: 1.1078 vs 1.09823. Euro, after its breakout test, is surging again against dollar.

Oil: 49.27, +0.42. The upside move in the range continues as oil takes on the 200 day MA again.

Gold: 1235.30, +5.30. Trying upside again after breaking down over a week back.


Monday showed some 3:1 NYSE breadth. This morning there is a story that hedge funds are 'piling' into just six stocks: FB, AMZN, AAPL, MSFT, NFLX, GOOG, and that they are accounting for most of the move.

It is true that those stocks, after their own hiatus, are back on track and punching out new highs. Often. But there are other stocks rising as well. If that NYSE breadth continues, if RUTX, SP400 follow NASDAQ, SOX (and now SP500?) the move not only continues, but it spreads out. There are, after all, leaders in a rally that move earlier, then others follow.

The funny thing is the leaders start early, people are happy, then complain it is only the leaders (as now). Then the move spreads out and the griping is then that there is a 'dash for trash' when the other stocks join in. The point: they will complain at all times. Look at the leaders, play the leaders, play other good stocks with good patterns as they emerge upside.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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