Market Alert - Pre-Market

Futures vs FV: SP +8.8; DJ +19.14; NASDAQ +99.13

No surprise that futures are way out in front on NASDAQ as AMZN, GOOG, MSFT, INTC earnings pace the market early. The rest of the market is quite quiet, making the coattail effect of these earnings an interesting point to watch this Friday session. Certainly the big names are set to gap higher, but will the money be spread evenly to others as well or will they syphon off the money from elsewhere?


GDP, Q3: 3.0% VS 2.4% EX vs 3.1% Q2. Apparently no storm effect, or if there was, then the economy is a LOT stronger than anticipated.

Inventories were key: added 0.73% to GDP (2.27% ex-inventories). That can be good, and in an upswing economy that would mean building inventories for anticipated sales, not as a result of declining sales.

Consumption: 2.4% vs 2.2% exp vs 2.24% prior. Added 1.62 points to overall GDP.


Earnings: Of course the huge beats. This quarter IS different: most companies are beating top line as sales rebound. After years and years and years of earnings beats based on cost cutting, there is now a return to actual growth indicating earnings beats. Very refreshing.

Misses: MRK (TL); EXPE (TB); MAT (TB). Why just cover misses? The beats list is too long.


Catalonia: Spain ready to impose direct rule.

Australia: Deputy PM ruled ineligible to serve as he has dual citizenship with New Zealand. Now the one-vote majority no longer exists and the government is tossed into chaos according to those reporting down under.


M&A: CVS wants to buy AET in an anticipatory move to fend off Amazon.


TSLA: Reports from a supplier say TSLA told supplier to cut parts production by 40%.


OTHER MARKETS
Bonds: 2.457% vs 2.456%. Yields holding the gains

EUR/USD: 1.1598 VS 1.1632. Dollar rally continues

USD/JPY: 114.21 vs 114.05

Oil: 52.51, -0.13. Still spinning its wheels at the start of the resistance

Gold: 1265.40, -4.20


Futures up all morning with a gap, holding near the top of the range as the open nears, moving up off some selling post-GDP. Yes the GDP report sparked fears of a more aggressive Fed. That is almost laughable; a more aggressive Fed. That is like saying a more aggressive Neville Chamberlain.

Anyway, a big open higher that likely holds on the day. Next week will be more important as to how it shakes out. Watching coattail effects today and whether money is pulled from some areas or if it is just a new money event.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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