Market Alert - Pre-Market

Futures vs FV: SP -4.65; DJ -39.05; NASDAQ +12.79

Futures were mostly modestly higher but over the past two hours the bids have shriveled. Not withered and died, but shriveled from a not very strong level. AAPL or no, it will be problematic whether the early NASDAQ gains can hold and if the market can close positive.

AAPL: it is up 6 clicks (3.7%) as its services business grew more than expected. Good thing because iPhone sales missed expectations despite all the glowing talk about China demand. What does AAPL have in the mystery box? Under Cook, nothing. It had to bribe investors with an extra $100B stock buyback (it already bought back $22.8B in stock in Q1, more than the market cap of most companies) to keep the stock higher. Not sure its gain will hold the day.


Earnings beats: CVS; CLX; EL; GRMN; ADP; YUM; GNRC; HUM; AAPL; MDLZ; TMUS; JNPR

Misses: SNAP (TL); GILD (TL, BL); Molson/Coors (TB)


ADP Jobs: 204K vs 225K vs 228K prior (from 241K). Heralded again as so strong. True, 204K were hired in a supposedly 'tight' market (as people get kicked off food stamps and other forms of aid because they are perfectly capable of working -- still a LOT of slack --slackers?-- to get out of the labor market to get anywhere near 'tight').

Slowest growth since 11/17.


Treasuries: Treasury is increasing auction sizes in order to pay for -- er -- FUND (there is no paying for) the rising debt.

Issuing a 2 month Treasury Bill. Great! More debt! Remember the arms race with the USSR that Reagan won by igniting the US economy so we could outspend the USSR into economic oblivion? Well, the current race is an economic arms race with China, and we are trying to outlast China's MASSIVE, MASSIVE debt (makes our look like nothing proportionately) and see if China goes bust first. If it does, holy cr*p will there be repercussions. Ultimately great for the US, but a lot of teeth gnashing by those backing China in the process.


OTHER MARKETS
Bonds: 2.979% vs 2.968%

EUR/USD: 1.2007 vs 1.1994. Euro rebounds after a recent beating.

USD/JPY: 109.76 vs 109.83. Even the yen gets a yen to move a bit higher in relief. Not zen, just yen.

Oil: 67.20, +0.05. Still strong.

Gold: 1309.60, +2.80. Trying to rebound, a bit, off the bottom of the range.


Futures continue to backslide ahead of the bell. Many of the AAPL suppliers are lower in the pre-market, showing you just how short the AAPL coattails are. After all, services don't benefit them, only AAPL. And when AAPL starts making its own chips, they will be SOL.

Tuesday after a morning slide some bids returned to keep the indices inside their ranges. For now, that is the key, i.e. holding the 200 day MA or the trendline in the indices as the case may be. Kind of sad, not looking for breakouts from the indices, just holding the ranges in order to keep basing so that they can possibly provide an upside move and breakout at some point well down the road. So, we look at the areas getting money and will be watching how oil, drugs, China et al perform today.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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