Market Alert - Pre-Market

Futures vs FV: SP +8.00; DJ +113.68; NASDAQ +25.42

Looks like some new money is hitting for a new month and is set to push DJ30 past 22K and tries to revive NASDAQ, RUTX, SP400 that hit new highs then reversed off those highs.

What great changes have occurred to drive stocks back up? Nothing. Same news background and indeed a weaker story. Oh, that is right: weaker is better because the Fed has said it will back the market if things are not peachy and the market has trouble making the upside on its own. Rally on.


Personal Income, June: 0.0 vs 0.3% exp vs 0.3% May (from 0.4%). Lowest rise since 11/2016

Spending: 0.1% vs 0.1% exp vs 0.2% prior (from 0.1%). Weakest since 8/2016.

Weaker income and spending. Buy!


PCE 0.0 VS 0.0 prior (from -0.1%

Core PCE: 0.1% as expected and in May


Jobs: UA cutting 280 or 2% of its staff.


Stagflation: Greenspan says it is about to start. Of course he is ridiculed. Chicago PMI Monday showed prices rallying much faster than new orders. Could be.


Earnings: not as many beats as misses.
Beats: UA (but lowered guidance); S

Misses: ADM (TL); PFE (TL); P (BL); PBW (TL, BL); X (TL)


Auto sales: Honda beats expectations; F -7.4% VS -5.5% expected.


Venezuela: Opposition leaders are taken, detained at gunpoint. This is what happens when socialism fails but the leaders remain in power: dictatorship. They were already an oligarchy and the failure of that allows the strong man to become a dictator.


OTHER MARKETS
Bonds: 2.310% vs 2.296%. Bonds off this morning as they continue bouncing around at support, unable thus far to make a new move higher.

EUR/USD: 1.18141 vs 1.18264

USD/JPY: 110.45 vs 110.28. Modest dollar recovery bounce.

Oil: 49.79, -0.38. Cracked over 50/bbl, fading back from a good rally.

Gold: 1272.50, -0.90. Pausing after a good Monday move.


Weaker data, so-so earnings, weaker auto sales, lower spending and income, a continued deteriorating geopolitical backdrop. All the more reason to rally as the Fed is there. Talk about the wrong signals.

Stocks set to open higher. We watch how chips, NASDAQ, RUTX, SP400 react to this gap upside. It is new money for a new month. Now we see what happens when the money is put in, the new ammo shot up.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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