Market Alert - Pre-Market

Futures vs FV: SP +9.00; DJ +99.98; NASDAQ +27.24

Futures started the morning session lower than the WED close, but have steadily recovered, rallying starting 7:00ET as the ECB news hit that QE would end likely at the beginning of 2019. Seems the markets are thus far handling a perceived more hawkish Fed and ECB.

ECB: Draghi says the ECB will end bond buying (its QE) at the end of the year. Rates will remain unchanged until the summer 2019, a year from now. That leaves more than enough wiggle room for the ECB to do something else if it so desires, e.g. nothing.


NKorea: Pompeo says NK lied about Trump agreeing to end sanctions. Honeymoon over.


China: Reiterates its threat that if the US imposes tariffs it will scrap any agreements reached thus far on trade. Never was a honeymoon here.


Retail Sales, May: 0.8% vs 0.4% exp vs 0.4 April (from 0.3%). Biggest jump since 9/2017.

Ex-Auto: 0.9 vs 0.5 exp vs 0.4 prior (from 0.3%)

Control Group: +0.5% vs 0.6% April (revised up, likely May will be as well).

Energy costs were up thanks to gasoline (17%), but the price profile for this time of year matches historical patterns so that is not really a big shock. Remember, however, retail sales is price based, not unit based. Thus if things cost more, retail sales rise, and it may just be inflation.


Downgrades: ORCL downgraded by JPM


Earnings beats: MIK; TLRD (but SSS missed estimates)


Tech: MSFT working on a system that would make cashiers and standing in line obsolete. AAPL is working on making data harder for law enforcement to retrieve from iPhones. Both are worth endeavors.


OTHER MARKETS
Bonds: 2.942% vs 2.977%

EUR/USD: 1.1725 VS 1.179

USD/JPY: 110.11 vs 110.30

Oil: 66.85, +0.21

Gold: 1307.50, +6.20


Futures are just off the highs the past 10 minutes as the Draghi holds his press conference, tap dancing around as usual. Still holding a good rebound for the morning, but of course the question is still how will the market react. Premarket is positive enough, but the bells still have to ring to open and close the session.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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