Market Alert - Pre-Market

Futures vs FV: SP -2.14; DJ -2.59; NASDAQ -3.70

Futures are undecided as the day after the FOMC decision opens. They were up modestly on the Dow, but all are a bit weaker just before the bell. The Fed will reduce its balance sheet starting October, but stocks and bonds are flat, still digesting what is happening.

Here it is in a nutshell: The Fed admits it does not understand the very things it is in charge of controlling, but is going to go ahead with its plan of action anyway. Been there, done that: Greenspan chased down a runaway consumer and the mythical wealth effect with rate hikes and an utter draining of liquidity. Everything crashed: markets and economy. The drop was so abrupt (from 10% growth to negative in just a few quarters) that investment in the US shut down for at least 3 years. Jobs emigrated, innovation stopped in the US -- it all went overseas, along with the manufacturing of the products we developed -- and we have never recovered.

SEC: Says its Edgar's unit has been hacked and that likely the hackers have gamed the system to make huge profits. The problem is so bad the SEC has now curtailed the new data tracker it was to roll out next month. That tracker has ALL information about any market participants in order for the SEC to better monitor insider trading, unusual trading, etc. Ironic isn't it? The SEC's tool for making sure the rules are followed is feared to be used to break the rules -- and gain the critical personal information of those it is trying to protect. Ah, government. And we STILL want it to run our healthcare?


China: S&P cuts rating to A+ from AA-. Reason: too much debt. Well, hell, the US just hit $20T. Isn't S&P going to act on US ratings? Oh, that's right. It was threatened with shut down under the Obama administration when it did that.


Copper: falls to 1 month low as metals drop. Yes, all is well. Full steam ahead with rate cuts, etc.


Philly Fed, Sept: 23.8 vs 17.1 vs 18.9. That is positive news.


AAPL: Watch goes on sale Friday but there are just a few MINOR problems such as the ability to connect . . . But AAPL promises a fix is coming.


OTHER MARKETS
Bonds: 2.261% vs 2.273% 10 year

EUR/USD: 1.1914 vs 1.1872. Euro bounces back from post-FOMC weakness Wednesday

USD/JPY: 112.39 vs 112.44

Oil: 50.29, -0.40

Gold: 1292.50, -24.30. Gold bombs on the day after.


Futures are flat. That tells us the market has not decided what the ramifications of the Fed actions will be. This is a good start because you can see from the ground floor the direction the big money will take it off of a flat, 'I don't know' open. The overall trend is up, so if all remains the same you would expect bids to return. If not, perhaps the algorithms are starting to sell.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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