Market Alert - Pre-Market

Futures vs FV: SP -1.50; DJ -9.90; NASDAQ -12.15

Futures were up overnight and indeed until just after 7:00ET. Then China announced a 25% tariff on $16B of US goods that include oil and autos. Futures faded to negative though they are off their lows the past half hour.

Not a lot of other news.

TSLA fury still rages as many who have never shorted TSLA shorted it yesterday after Musk's comments. The board released a statement saying they had discussed going private several times but that is not enough. A 13-E needs to be produced showing they have the claimed financing. Plaintiff's lawyers are already preparing their petitions to file so they can just fill in the blanks when the details/facts emerge. Even if everything Musk tweeted was true, as one analyst noted, if he doesn't like short sellers just wait until he deals with the secured bond holders.


Mortgage Apps: -3.0% vs -2.6% prior. Several weeks of lower apps. This is the trend as the Fed hikes the short end, and now the longer end is trying to rise.


Earnings beats: KORS; CVX; SNAP; DDD

Misses: DIS (TL, BL); PZZA (TL, BL); WEN (BL); WWW (TL)

DIS missed but it is holding its price, off less than a dollar from the close.


OTHER MARKETS
Bonds: 2.977 vs 2.977%. Another unchanged session is interesting as bonds broke lower but are not continuing the fade.

EUR/USD: 1.1582 vs 1.1596

USD/JPY: 111.07 vs 111.37

Oil: 68.25, -0.92

Gold: 1216.50, -1.80


A bit of a soft open is not a bad thing as the indices are still trending higher. The reason for the decline, however, is trade, and that hits certain areas. That said, the past three negative trade announcements, the bigger ones such as today's, were met with buying that recovered the indices. So, the market has that going for it . . . AND the odd tweet from Musk.

Thus, we watch how stocks recover from a trade-related soft open in an otherwise trend higher. Of course, SP500, SP400, NASDAQ are all at or near new highs and have shown the affliction New High Anxiety. Interesting mix of forces: recovery after a trade announcement versus the inability to really break through to those clean new highs.

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Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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