Market Alert - Pre-Market

Futures vs FV: SP -16.46; DJ -151.92; NASDA -59.17

After a day's respite upside, stocks are set to gap sharply lower. More Turkey worries are blamed.

Turkey: Lowered the allowable conversion of lira to 25% from 50% as a move to dry up the supply of lira outside Turkey to prevent shorting. China did this during is financial crisis.

Turkey appeals court denied American pastor's appeal.


China: Shanghai composite back near 2018 lows, yuan sharply lower. Again.


Retail Sales, July: 0.5 vs 0.1 exp vs 0.2 prior (from 0.5)

Ex-Auto: 0.6 vs 0.3 vs 0.2 (from 0.4%)

Control Group: 0.5% vs -0.1 prior (from 0.0)

Takeaway: Nice surge but taken away by the sharp revisions.


Non-Farm Productivity: 2.9% vs 2.0 exp vs 0.3 prior (from 0.4)

Unit Labor cost: -0.9 vs +0.5 exp vs 3.4 prior (from 2.9). Wow, another big revision upside accentuates the drop this past month.


Empire Mftrg: 29.2 vs 20.0 vs 22.6


OTHER MARKETS
Bonds: 2.857 vs 2.893%

EUR/USD: 1.1311 vs 1.1344

USD/JPY: 110.87 vs 111.20

Oil: 66.46, -0.58

Gold; 1193.30, -7.40


Futures tumbled from the early open to 7:30ET, bounced, then tested back to those lows at 9:00ET. Potential double bottom premarket but dubious whether any upside momentum holds through the opening bell.

Market is weak as stocks with really good earnings are sold as well as the results are now never good enough for the current market mindset. That Turkey is impacting US stocks when Turkey has not impact economically underscores the weakness. Some stocks showed good volume Tuesday in their lateral moves (V, VRSN, ADBE) and that was interesting for the upside, but interesting is not the same as buying.

Thus, another downside open as upside is again undermined. That has not changed since NASDAQ hit those new highs and was thrown back each time.


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Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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