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Friday, March 2, 2018

Market Alert - Pre-Market

Futures vs FV: SP -18.75; DJ -243.00; NASDAQ -74.50

Any bounce potential is at least deferred as the world reacts to the Trump tariffs (Trump: trade wars are good and easy to win) and Japan' Kuroda saying it might be time to end Japan's QE. Perhaps the market would have weathered the first, but not the latter in combination. For some history, Bush imposed 30% steel tariffs. Bonds surged massively, stocks sold 30%. 30% tariff, 30% SP500 decline. As the Frenchman in 'The Matrix Reloaded' would say, cause and effect.

Futures are feeling some of the effect. Obviously. But, easy to win. Winning. The problem is, letting the other countries do what they have done for so long, changing the status quo 'outrages' the 'global community'. The WTO goes ballistic, sanctions are threatened -- the irony of course is that the set up is already uneven and when you try to even it out, they want to make the field even more skewed. Ah, global politics. Another example: terrorists attack. Other side strikes back. Terrorists, who started it, vow retaliation. Good grief.

Retail is mixed. FL missed TL. JCP missed TL, closing stores. JWN missed BL. GPS however beat top and bottom line.

VMW upped its forecast, trying to overcome the Thursday drop re Dell.

Bonds: 2.841%, rebounding yields

EUR/USD: 1.2301, euro jumps

USD/JPY: 105.47, dollar dumps

Oil: 60.83, -0.16

Gold: 1323.80, +18.60

Stock futures are off the lows -- not enough to matter. Stocks are set to open down Friday, skipping the pretense of attempting a move higher at the open. After the downside open you see if there is an attempt to buy after 3 and change days of downside. That would be short covering because of a weekend after 3+ days downside. The many unknowns with tariff responses, Japan monetary policy, Putin missiles, etc. also lend toward any bounce just being short covering ahead of the weekend. At this point we see how the key stocks can hold near support as they have done.

Jon Johnson, Chief Market Strategist
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