Market Alert - Pre-Market

Futures vs FV: SP +8.64; DJ +108.34; DJ +13.84

Quad witching expiration. Futures trended higher in the morning but are backsliding as the bell approaches.

Not a ton of news but CNBC is harping on the tax deal and how it is not a done deal, highlighting the list of senators who are questionable. That list certainly has not changed as to the problematic members, but this has a lot of momentum. Of course I thought the ACA repeal would pass because of the scoring -- but it did not. In any event, those inside the circle say that everyone will come along. They need to do it today in terms of setting a vote Monday.


NY EMPIRE PMI, DEC: 18.0 vs 18.0 expected vs 19.4 Nov. 5-month low on the Empire and second miss in a row. Some are saying stagflation. That sure seems a stretch at this point as 18 is a long way from the breakeven 0. Gee, I sound like Greenspan and his economic 'slow patch' terminology.


Earnings beats: ORCL ($12B buyback); ADBE (upped 2018); COST; JBL (AAPL supplier)


Industrial Prod, Nov: 0.2 vs 0.3 exp vs 1.2 Oct (from 0.9)

Capacity, Nov: 77.1 v 77.2 exp vs 77.0 prior


OTHER MARKETS
Bonds: 2.36% vs 2.351%

EUR/USD: 1.1793 vs 1.1776

USD/JPY: 112.22 vs 112.36

Oil: 57.31, +0.27

Gold: 1264.10, +7.00


Futures are fading from morning highs ahead of the open, and as you have seen many times the past two months, morning futures are not a reliable forecast of market direction for the session. Modest gains give sellers something to shoot at.

Thursday saw small caps get knocked back to the 50 day EMA and big name NASDAQ gave up some good gains on the session. That fade by the big cap tech left them still a group to watch as they continue the test of the rebound off the sharp early December rotation selling. Of course the small caps struggled on the tax uncertainty news. Watching to see if they improve as the news flow emerges.

Futures eroding farther off their morning highs. The early bounce does not have much staying power, will be tested, and then key for the morning after that is whether the bids return. As for entering new plays we will see how they perform. Not expecting a lot of upside fireworks today given the tax reform questions and nothing really happening to lock it down until next week.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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