Market Alert - Pre-Market

Futures vs FV: SP -15.48; DJ -144.23; NASDAQ -48.71

Global stocks are lower, the US following suit, as the Turkish lira dives 14% as its economy sees surging inflation and collapse. Its erstwhile leader, Erdogan, says "if they have got dollars, we have got our people, our right, our Allah." Okay, so much for solving the problem. Lira dives, then Trump, smelling the blood in the water and an angle to affect the release of the US pastor held prisoner, doubles steel and aluminum tariffs on Turkey (to 50%, 20%, respectively). You have to admit, Trump does not waste time. On certain things -- where is that wall he promised? Not saying it is good or bad, but just noting if he wants to do something, he does it.

So, Turkey is in crisis as Erdogan tells his people to convert dollars to lira. Oh THAT is working. The rest of the world is seeing another centrally controlled economy collapse. Prayers for the people of Turkey as their leaders send them into the abyss. But, I digress.

Markets. World markets lower, US included. The US has danced at new highs for a few weeks. The concern was whether sellers would emerge again. The Turkey crisis is providing the sellers. The key is just how aggressive they will be, whether this early drop is assuaged by notions of US economic strength, China's troubles with the trade war.

That remains to be seen but my gut (and guts are not worth much) is US markets close higher than they open.


CPI, July: 0.2% vs 0.1 prior. Year/year 2.9%

Core: 0.2 vs 0.2 prior. Year/year 2.4%, the highest since 12/2011. That is getting hot, and it is not helping the morning issues.


OTHER MARKETS
Bonds: 2.899% vs 2.988% 10 year. Bonds of course rising

EUR/USD: 1.145 vs 1.1582

USD/JPY: 111.01 vs 111.07

Oil: 67.24, +0.43

Gold: 1220.60, +0.70


Futures still dancing around the session lows, tried to bounce but failed. Ugly open ahead, but the US is strong, Turkey and others are not, and US markets will be a haven. Again, we are watching for a close above the open, the question is how much AND AND AND if as more information comes in, whether we feel next week will suffer that Monday-Tuesday selling that often follows late week weakness during a crisis situation. We will of course closely watch how stocks recover and if they hold important levels making them worth hanging onto.


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Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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