Market Alert - Pre-Market

Futures vs FV: SP +9.91; DJ +26.43; NASDAQ +42.25

Futures were mixed heading into GDP, faded slightly on misses expectations, but have rallied back after the news soaks in. Still below morning highs on SPY, but NASDAQ with its AMZN love fest is showing a solid open. Indeed, NASD futures were 26.75 at the announcement. A solid post-GDP advance.

GDP Q2: 4.1 vs 4.4 exp vs 2.2 Q1 (from 2.0). Nice revision.

Personal Consumption: 4.0% vs 0.5% Q1

Price Index: 3.0 vs 2.2 exp vs 2.0 prior

PCE: 2.0 vs 2.2 vs 2.2 prior

Business Investment: 7.3% vs 11.5% Q1

Government Spending 2.1%.

Inventories: Declined and reduced GDP by a full 1%. That was the surprise that kept it from 5+%.

Decent but not reaching the whispers. Of course, inventories faded (from sales being hot, a good thing), and that was the difference in actual versus expectations. Everyone is saying this is unsustainable. There needs to be more freedom, e.g. totally getting rid of ACA and more tax relief as discussed. That would help sustainability. As noted before, I am concerned given the index action this may be showing peak cycle. I firmly believe the US can growth 3+% sustained if its citizens are freed up, but I am simply looking at current growth index action and the economic data. Much depends on how they react from this recent back and forth chop showing distribution.


Earnings beats: MRK; SBUX; EA; CMG; EXPE; AMZN; INTC

Misses: XOM (BL); CL (TL); AMZN (TL); SAM (BL)

TWTR: sees monthly usage drop.


Trump: to give an address at 9:30ET


FAANG: Declining revenue growth (EPS beat handily) is a function of market penetration a wise pundit notes this morning. Just as a hot retail chain cools as it reaches market saturation, the same thing is happening to NFLX, FB, and yes, AMZN. AMZN missed on its revenues.


OTHER MARKETS
Bonds: 2.963% vs 2.982%. Bonds rally on solid GDP. Go figure.

EUR/USD: 1.1633 vs 1.1641

USD/JPY: 111.06 vs 111.07

Oil: 69.52, -0.09

Gold 1219.60, -6.10


Okay, the market is going to rally on the numbers. Great, we make more money on AMZN and other positions. I am very interested in how this market closes today. Not convinced it will be higher than the open, not convinced some indices won't be negative.

______________________________________
Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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