Market Alert - Pre-Market

Futures vs FV: SP +5.9; DJ +121.32; ANSDAQ +8.5

Futures started higher, rallied, held a range for 3+ hours. Now heading into the open they are flagging, still holding gains but fading off the morning range. NASDAQ is 11 points off the high at 8:30ET.

That is not the best indication for an open. Prefer in uptrends to see softer opens that find bids. After several sessions upside for NASDAQ and growth, this higher open and weakening futures suggests stocks could struggle to hold the upside open.

Productivity, final: 0.4 vs 0.6 exp vs 0.7 first read

Unit Labor Costs: 2.9% vs 2.8 exp vs 2.7 first


Trade Balance, April: -42.6B vs -48.8B exp vs -47.203 prior (from -49.0B). Oh no, are the Trump policies working?


Speaking of trade, China offers a proposal, US offers a proposal, so the trade issues today are viewed as 'fading.' This is, however, part of the 'art.' Tough positions, mitigating words, a return to tough statements and positions. Same with North Korea; Trump appears to be unstable and volatile, but that is the plan; keep the other side totally off balance.


North Korea: Putin calls Trump 'brave and mature' in how he is dealing with the country. Talk about unstable and volatile.


FB: Gave data to several China firms, one on the US intelligence flagged list. Nice.


ECB: Some officials suggest the ECB might actually, potentially, possibly discuss an end to QE . . . at some point. So, the euro is stronger on this scrap of information. Good grief.


Jobs: HPQ cutting 5,000 as it continues 'restructuring,' apparently the new word for declining.


OTHER MARKETS
Bonds: 2.957% vs 2.935%

EUR/USD: 1.1763 vs 1.1762

USD/JPY: 110.01 vs 109.878

Oil: 65.09, -0.43

Gold: 1301.90, -0.299


Futures continue weakening into the open. Likely not an open to buy. Will watch how it tests off the open, perhaps take some gain here and there (e.g. DATA), then see if any entries work. Watching ZBRA, NTNX, ON, AKAM closely as they looked pretty solid Tues. Perhaps should have entered AKAM but will see what it does this morning.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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