Market Alert - Pre-Market

Futures vs FV: SP -3.94; DJ -31.71; NADSAQ -16.22

After the rush higher Wednesday in anticipation of and on the release of the tax proposal, stocks are a bit hung over, with futures fading some of those gains.

Stocks pared some of the gains in the last half hour of Wednesday and held pretty much steady through all the premarket until testing lower into 8:00ET. A modest recovery off 249.88 (midday consolidation level from Wednesday) has futures cutting losses toward the open.

Q2 GDP, 3rd: 3.1% vs 3.0% exp vs 3.0% 2nd read

Personal Consumption: 3.3% as expected

PCE: 0.9% as expected

Corporate profits: 0.1% vs 0.8%. Still a problem with profits. Of course all is well, just not profits? As Hal said about gravity in the movie 'Cliffhanger,' GAAP is a b***h.


Wholesale Inventories: +1.1%, the highest since June 2015. The 'if you build it, they will buy' mentality seems to be in place, particularly with vehicles as they are up 1.2% mo/mo and 7.4% year/year.


Taxes: House Speaker Ryan on CNBC: has the votes, would get democrat votes. Heard THAT before. From HIM. He says the 'process' is there as they actually said 'hi' to some democrats on a day the GOP discussed the plan. THAT will surely convince buttheads such as McCain that everyone is happy. I am still upset about the 25% for small businesses versus 20% for big corporations. BS!


Stephen Roach: has been around long enough to listen to. Says market is similar to 2007,and rate hikes could kill the rally.


OTHER MARKETS
Bonds: 2.332% vs 2.307%

EUR/USD: 1.1777 vs 1.1746. Dollar off a bit

Oil: 52.51, _0.37

Gold: 1286.10, -1.70


Stocks are recovering off the lows toward the open. Will see how the rotation works today, i.e. if FAANG loses some of the bids and AAPL, FB backslide. Will money continue to biotechs, chips, etc.? we will see.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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