Market Alert - Pre-Market

Futures vs FV: SP +20.01; DJ +233.86; NASDAQ +72.07

Stocks are set to gap higher for a second session. They held gains Monday -- for the most part -- but on very light trade and the large cap indices closed below the 50 day MA's again. This morning's action should push them through that level to join RUTX and SP400. The question is whether they can hold those moves.

Futures gapped higher and then continued a steady climb toward the open. Not just a gap and stall, but a steady build as more earnings have hit the wires.

NFLX was out first Monday afterhours and posted very good guidance. GS, JNJ, UNH have followed, all with very solid earnings. Thus far earnings are definitely helping, Again, will the indices hold the moves and continue the tradable rally off the SP500, DJ30 test of the Feb lows and double bottom?

AMZN is up 18 clicks. It appears the NFLX earnings (+22) are ginning up interest in other somewhat dormant stocks.


Housing Starts, March: +1.9%
Single Family -3.7%. Multifamily +14.4%.
Meaning? Rentals are still highly favorable post-housing crash and then the long period when no young people could afford a down payment on a house thanks to the terrible economy from 2008 to 2016.


Trade: China slaps a 179% tariff on US sorghum


China: Cuts its banks reserve ratio requirements, effectively devaluing their currency. This after Trump accused China and Russia of manipulating their currencies. Of COURSE China does so; it always has and always will. China does not have the same view of business ethics as the western world. Just the way it is. Thus, the decades of 'velvet gloved' negotiations have resulted in the opposite effects we wanted, and now we get more in your face negotiations as a result. China protests the tactics, but China had it so easy for so long it is upset that the cozy arrangements for it are being called into question. It is difficult extricating yourself from bad deals/arrangements.


Taxes: Tax day. As Ron Paul says, income taxes and freedom are not compatible.


OTHER MARKETS
Bonds: 2.841% vs 2.829%

EUR/USD: 1.2348 vs 1.2379

USD/JPY: 107.15 vs 107.11

Oil: 65.86, -0.36

Gold: 1341.10, -9.00


Stock futures continue edging higher into the open, an obvious upside gap to come. A move over the 50 day MA's on the open looks likely.

You can bet there will be some early profit taking and we will see if stocks survive that, if the indices can hold the ground gained. That is the key for the day.

NFLX is set to open near 330. Its closing high from March is 331.44, intraday 333.56. Not a breakaway gap on the open, and likely some early profit taking on the move. Then, however, we see if it stabilizes and can take out that 333 level. It helps that other stocks are reporting solid results as well.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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