Market Alert - Pre-Market

Futures vs FV: SP +7.91; DJ +28.45; NADSAQ +16.38

Futures opened higher and rallied to modest pre-market highs. Some backsliding the past hour but still holding some gains into the open. Not a great pre-market after a good Tuesday that saw the large cap indices join RUTX, SP400 over the 50 day MA. A lower open would be fine, but stocks such as AMZN (+11) are moving NASDAQ up much stronger than the other indices.

The sluggish open may mean some early testing versus another straight shot to the upside today.


Earnings are the key and they are mixed. The bald headed guy says they are not what he wanted to see over the past 24 hours, meaning mostly IBM, LRCX.

BEATS: MS; TXT; IBM (lowered guidance); UAL; CSX; ISRG; LRCX (beat, increased guidance)


China/Trade: China says it has "emergency response" plans at various levels to retaliate against more US tariffs.

Speaking of which, the US has initiated a probe into steel wheels from China as to whether they are being dumped in the US.


North Korea: CIA Director Pompeo met with Kim Jong In over the Easter weekend. After years of molly coddling him, you have an administration taking a tough stand and the chips appear to be falling into place. In our family we have a saying, if you expect nothing, you get nothing. It appears for decades the world fretted over what NK could do and tried to placate its leaders instead of demanding they act responsibly. I think there was a 'Twilight Zone' about this with the kid with incredible powers and everyone feared him. Then one woman came along, recognized he was a kid, treated him accordingly. Oh well. Good things to hear, very good things. This is big.


OTHER MARKETS
Bonds: 2.849% vs 2.83%

EUR/USD: 1.239 vs 1.237

USD/JPY: 107.21 vs 107.01

Oil: 67.70, +1.18. Made the test of the breakout and now surging back upside.

Gold: 1355.30, +5.80


Futures remain sluggish toward the open. More and more earnings are coming out. LRCX will open down 10, but that is well off the 15 last night. It still looks as if there is a bid under this move, and after an ambivalent open that likely sees stocks sluggish for the first hour or so, bids likely return. AMZN is going to open higher, continuing the Tuesday gap and rally. We want to pick up some of that after we see the initial trade direction and then try to get a good entry.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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