Market Alert - Pre-Market

Futures vs FV: SP +13.54; DJ +157.55; NASDAQ +28.95

Futures gapped upside and rallied to 7:00ET. They peaked at that point and have slid some after the morning data hit. Basically all markets are reflex bouncing the other direction from Tuesday and the scare related to the Italian politics. Italy's bond auction went well and one politician said perhaps no July elections. That helped calm fears.


GDP, Q1 2nd read: 2.2% vs 2.3% exp vs 2.3% first read
Most every category fell though business investment was strong.
Consumer spending: 1.0%
Business investment: 9.2%
durable goods: -2.2%
Services +1.8%

Basically disappointing, but then again, as we chronicled, Q1 was that slow patch in the economy, the slow patch that the economy is emerging from.


ADP, May: 178K vs 183K vs 163K (from 204K initial read)


Earnings beats: CRM; DKS; DSW; HPQ (TL); KORS


Trade: Trump said he would push forward on $50B in tariffs on Chinese goods and Ross said that you could negotiate trade and implement tariffs at the same time. This 10 days after Mnuchin said trade issues were on hold. China protests, but this is the Trump, and indeed Chinese, style: keep the pressure on, and indeed nothing will happen if things are put 'on hold.' the only way they have got this far is through pressure and keeping the other side guessing. That continues.


OTHER MARKETS
Take back some of the moves from Tuesday skewed by the Italian issues.

Bonds: 2.844% vs 2.786%. Bonds calm down and give back some of the Italian scare gains from Tuesday.

EUR/USD: 1.1623 VS 1.1543. Dollar gives back some of the gains as well.

USD/JPY: 108.83 vs 108.56

Oil: 67.10, +0.37

Gold: 1306.30, +2.20


Futures are holding gains but off the highs over the past 1.5 hours. Decent opens ahead in response to the Tuesday selling, but bids have to remain, moves have to hold, and leaders need to break out. NASDAQ and other growth needs to lead. RUTX is in position after its test, NASDAQ and SOX need to step up.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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