Market Alert - Pre-Market

Futures vs FV: SP +15.97; DJ +232.51; NASDAQ +49.97

Stock futures gapped higher in a continuation of the continuation of the relief rally (still calling it that). Futures are off the highs as they have range-traded after the upside gap. Don't like these gaps as they give sellers something to shoot at. Sellers are still there; they are quiet now letting the market run upside, but they will return and take their shots at some point.

After the initial morning data (PPI, Philly Fed, NY PMI) futures fell to lower morning lows, but they came right back.


Earnings are credited with helping fuel the upside to new recovery highs.

Beats: CSCO; WMI; USFD; AMAT; SHOP; MAR; NTAP

Misses: AVP (TL); TRIP (BL)


Lots of data:

PPI, Jan: 0.4% vs 0.4% vs -0.1% prior.

Core PPI: 0.4% vs 0.2% vs -0.1% prior. Yr/yr: 2.2% vs 2.3%

Final Demand core: 2.7% vs 2.6% prior year/year

Core is hotter mo/mo even though lower year/year. Another example of rising costs though many say does not pass through. Right.


Empire PMI, Feb: 13.1 vs 19.0 exp vs 17.7 prior. Disappointing as all PMI's are fading some off end of year strength.


Philly Fed, Feb: 25.8 vs 22 exp vs 22.2 prior. Very solid.
Prices paid: Much stronger.


OTHER MARKETS
Bonds: 2.922% vs 2.913%

EUR/USD: 1.2492. Euro still strong

USD/JPY: 106.51. Yen still surging against dollar

Oil: 60.60, 0.00

Gold: 1354.70, -3.30


The rebound rally continues with an upside gap. The gap showed some resilience in light of the economic data that showed producer prices rising as well, indicating the entire pipeline sees more pricing pressure.

The gap makes it harder to enter positions given the view is this is still a relief move. We will see how the gap is treated and if there are entries, also watching what plays are hitting targets, and of course watching the potential resistance levels. SP500, DJ30 are going to jump up to the 50 day MA area, but we still think this rally has more upside to it than that level. It might, however, hit that level and meet some selling resistance before it continues.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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