Market Alert - Pre-Market

Futures vs FV: -3.73; DJ +2.14; NASDAQ -9.67

PPI, Aug: 0.2 vs 0.3 vs -0.1. Yr/yr 2.4% vs 1.9% prior

Core: 0.1 vs 0.2 vs -0.1. Yr/yr 1.9%

Gasoline +9.5%. Consumer loans +1.7% (highest since 11/2015)

Inflation up but below Fed's 'target.'


Taxes: Bloomberg interview with democrat Joe Manchin, W Virginia: Trump's willingness to work with democrats as shown in debt ceiling deal and in a meeting last night with both sides leaves the situation "very promising" for achieving what Manchin correctly styled as much-needed tax reform to make the US competitive, emphasizing the benefits to the middle class. Well, that is . . . very promising.


NKorea: Will accelerate its nuclear program in response to the UN sanctions. Well, that is a surprise.


Bitcoin: Jamie Dimon Tuesday said it was a fraud and would fire anyone trading it. This morning Mohamed El-Erian on CNBC stated that Bitcoin should be valued at half of its present value. Question: How the hell does that blow-hard El-Erian know the correct market value for Bitcoin? For anything? The MARKET sets the value, and these pontificating, self-aggrandizing, pompous, tin plated titmice are just unwelcome noise. Okay, a bit of a digression. Sorry about that.


Mortgage apps +10% as mortgage rates fall. Amazing how that works.


Jobs: TGT plans to hire 100K for holiday season. Expecting more traffic than the stores have shown this year? To be fair, TGT sales have rebounded some the past couple of months after tanking on the transgender bathroom thing. I have not been in a target in over two years; wonder what the bathrooms look like now?


M&A: JWN is rumored to be going private. Centene is buying a private insurer. Ho hum.


CNBC is calling Trump the $2T man, i.e. the market value added since he was elected President. Trump is exhorting Congress to work fast on tax reform. There is a whiff if climate change (hey, REAL climate change) in DC with the Debt ceiling deal and the communications with both sides. This could get done. THAT leads to getting healthcare done as well.


OTHER MARKETS
Bonds: 2.169% vs 2.167% 10 year.

EUR/USD: 1.1968 vs 1.19706

USD/JPY: 110.14 -- holding flat after the bounce

Oil: 48.67, +0.44

Gold: 1337.00, +4.30


Futures gapped lower in the week hours and has range-traded since, now at the bottom of the range for the morning. Definitely a lower open and of COURSE that has several crowing about how the rally is over. That is of course a possibility and with NASDAQ, DJ30, SOX, RUTX, SP400 at prior price highs you must watch this.

That said, Monday was a big breakout, Tuesday continued the move. A soft open after that kind of move is not tragedy as often a soft open gives the bids a chance to come back in. Will watch to see of the softness holds in the range and if the bids do come in, we let positions work.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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