Market Alert - Pre-Market

Futures vs FV: SP +5.49; DJ +65.01; NASDAQ +15.27

Another day futures will start higher with a morning setup very similar to Monday and Tuesday, i.e. a gap higher early morning, holding a relatively tight range to the open. Tuesday that pre-market move higher was sold. Similar fate? The bids continue to show up despite the political intrigue, despite no real change re NKorea other than a bit softer talk. But, that seems to work for the market as, at least at the open, the upside continues.

FOMC: Statement at 2:00ET


Housing Starts, July: -4.8% vs +0.4% expected

Permits: -4.1%

Multi-family starts: -35.2% year/year. That makes sense after the huge boom in apartments. It had to slow at some point and should slow in a recovery. Not really a great recovery, because you know what? Home buyers are now putting down less and less on homes as we revisit some of the issues that caused problems in the financial crisis.


ECB: Draghi is supposedly NOT going to deliver a new policy message at Jackson Hole. Just going for the scenery and fishing I suppose.


Earnings beats: TGT (and raises guidance); URBN; A


OTHER MARKETS
Bonds: 2.275% vs 2.264%. Deflating bonds pushing yields back up.

EUR/USD: 1.1669. Mostly flat ahead of today's FOMC meeting.

USD/JPY: 110.86. Flat here as well

Oil: 47.55, 0.00. Wow, flat here also.

Gold: 1276.80, -2.90


Again, the algorithms obviously did not sell. Bids, albeit slight with no volume, are pushing stocks higher, but as Tuesday showed, it is no swoosh higher. Seen that before as well: selling ends, market starts up in a bit of fits and starts, some strong sessions, some weak, but making its way higher.

Now, with the FOMC this afternoon, it may very well be a case of gapping higher then hanging around until the FOMC statement issues.

What the market is showing, despite the rise, is rotation that is taking money from some areas for the benefit of others. Not a lot of new money being committed just yet, but money is still chasing the upside. Small and midcaps are getting hit, so watching their reaction today from the Tuesday selling. Also watch China stocks; overall good but showing some near term chop that could lead to one of their pullbacks.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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