Market Alert - Pre-Market

Futures vs FV: SP -14.11; DJ -115.40; NASDAQ -45.48

Last night's NKorea missile launch and flight over Japan caused a global equities selloff that is holding over this morning. That said, the low point was hit at 5:00ET, and since then stocks have recovered off the lows but are nowhere near the Monday close levels.

The President says all options are available. South Korea says a 'massive' show of force in response is necessary. The guy wearing his father's pajamas in NKorea is insane, has a death wish, or just does not understand the old story about poking the bear with a stick. Perhaps he watches the 'messing with Sasquatch' commercials and we should portray Trump as Sasquatch?


Houston flooding continues with areas on the south and east side receiving another 10+ inches last night, putting some areas at 49" of rain. Please keep those people in your prayers; we have one of the kids that stays at our farmhouse trapped in his truck in the midst of it. This is a major tragedy for the country.


Earnings beats: BBY doing very well in the shadow of AMZN. That pendulum has swung back some for this company as it, similar to WMT, is adapting in an AMZN world. CTLT, JLL also beat.

FL: After missing its earnings recently, FL warns for the future and it is ugly. Expensive shoes are not selling as well.


That speaks to a bigger situation. Vehicles are massively overstocked in the country. The Texas flooding will reduce the fleet of cars available and many cars already sold will be losses, to that may help. Tragic way to solve a problem.

Anyway, before the storm, auto prices of new and used vehicles were falling faster. There are promotions for $15K off, 25% off MSRP, and more for many trucks -- trucks in Texas getting such huge discounts. SUV's are said to be crazily oversupplied. Now you see high end shoes and the like finding few buyers. SOMETHING is going on with the consumer. The old 'tapped out' phrase comes to mind. You know it is getting bad when you start seeing commercials saying 'most homeowners don't realize how wealthy they are,' and then tell you to take out a home equity loan or refinance to 'get your money.' Yes, we are back to the housing crisis mentality once again.


OTHER MARKETS:
BONDS: 2.103% vs 2.175% 10 year. A bit of a rebound in bonds.

EUR/USD: 1.2032 vs 1.19678. Euro continues breaking higher.

USD/JPY: 108.55 vs 108.04. KKorea flies a missile over Japan, the yen rises. Go figure.

Oil: 46.60, +0.03

Gold: 1328.50, +13.20. Gold a safe haven given all going on in the world.


Futures hit a recovery peak about an hour ago, faded some. Could be the situation that triggers the bear flags in SP500, RUTX, SP400. Will those be enough to drag down the good patterns in NASDAQ, DJ30, SOX? We will see if the biotechs can fill in the shoes of the China stocks and other leaders that are struggling.





Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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