Market Alert - Pre-Market

Futures vs FV: SP +9.75; DJ +68.00; NASDAQ +28.00

A new quarter, a short week, and a short session, and futures are up smartly to start things off.

A short week with a lot of news from FOMC minutes to the ISM to Jobs Report Friday.

M&A: AKS buying Precision Parts. Red Ventures capital is buying RATE

State budgets: IL legislature passes a 32% tax increase on individuals and 33% on corporations in an attempt to avoid a junk credit rating. The republican governor says he will veto, but with a democrat legislature it does not look as if there is any other solution of interest other than tax hikes.

New Jersey and Maine are also in budget crises of sorts. If you get a lot of funds from someone else (i.e. the federal government and our tax dollars) you tend to overspend. Then crisis always hits.

Speaking of tax hikes . . . it is reported that Trump advisor Bannon wants the highest tax bracket "to have a 4 in the front." Populism, not conservatism from the look of it.


OTHER MARKETS
Bonds: 2.291 vs 2.304%

EUR/USD: 1.1367

USD/JPY: 112.87. Down considerably from last week

Oil: 46.46, +0.42

Gold: 125.80, -16.50. Gold has lost its mojo and is breaking below the 200 day MA.


Futures gapped higher in the very early pre-market and looked as if they would hold steady. Over the past 40 minutes, however, they accelerated to the upside.

This looks a lot like a first of quarter money dump even with light trading desks. That is the key, however, light trade. It does not take a lot of money to push the bids higher and higher. Perhaps some want to get a head start on the new quarter, boding well for Wednesday, but these half sessions are very difficult to gauge.

The bias for the majority of the market remains upside, so in the absence of catalyst you get the lift. Add a bit of new quarter money and you get a solid open. Of course Friday stocks rallied pre-market and then were back and forth all session. Again, a half session is tough to get involved with. We will, however, look at partial positions.

Watching how chip stocks perform today. Many remain at support while others have broken. Is there a serious bounce attempt or bear flags?

Also watching RUTX: Looks as if a new high is in the cards, at least at the open.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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