Market Alert - Pre-Market

Futures vs FV: SP -3.91; DJ -14.38; NASDAQ -9.63

Not a lot of 'outside' stories or scheduled data today, so earnings get more of the interest.

BEATS: CVS; W; KORS; CBS; MAR, NCLH; USCR

MISSES: TIME (TL); VRX (cut revenue guidance); AVIS (TL, BL); TH (TL, BL)


SP500: 13 days of 0.3% or less daily moves. That is a record dating back to 1927. The question is which adage applies? Don't short a dull market or fear lethargy at important resistance?


Sentiment: Gundlach says volatility is about to jump and that playing that jump is his highest conviction trade right now.


Tax Reform: Several stories about this today and they focus on the corporate rate with most thinking the 15% Trump proposed as the negotiating tool. In reality, that is the most important area. US prices are artificially higher, significantly so, thanks to the 35% on the face tax rate. Not all pay that of course, but many small, mid-size, and even large corporations do. The average citizen is impacted dramatically by higher prices and no one believes, or shouldn't, that the tax dollars taken by the government go back anywhere near dollar for dollar to the taxpayers. they are better off with the lower prices than the 'benefits' of a huge government taking in tax dollars and dolling them out to itself and then some to the proletariat. Of course, economics intelligence is not something Congress has. Politics.


Biotech: Several are going to try and lead the group higher as test results are out. ENDP, FGEN, ESPR are a few.



OTHER MARKETS
Bonds: 2.67% vs 2.257%. Bonds off a bit, still trying to figure out if they want to continue the rally.

EUR/USD: 1.1814 vs 1.1795. Dollar back to losing ground.

USD/JPY: 110.37 vs 110.75. Dollar down modestly here as well, still stuck in the mud on a bounce attempt.

Oil: 49.36, -0.03

Gold: 1268.30, +3.60


So, stocks are going to open a bit flat after a decent day. Now we see if the bids return. Down all morning, so not trending lower to the open.



Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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