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Wednesday, September 12, 2018

Market Alert - Pre-Market

Futures vs FV: SP -1.84; DJ +1.94; NASDAQ -9.87

Futures are flat, trending lower from a higher start early morning, trading just off fresh pre-market lows.

A lot of undercurrents with of course 'trade' still a backdrop that is referred to several times on each financial station. Not a specific new issue or story with trade, just the 'trade . . .' reference as causing a drag on stocks. Funny, on rallies such as Tuesday nary a reference to trade. When the market is not up, however, hunt for a reason, and 'trade . . .' is an easy cop out.

Fears of a global slowdown are big and it worries me. Not the slowdown, but the reaction that will come. Just as in the late 1990's, the US is strong, much stronger than the rest of the world. There are those who will want to avoid a wide gap between the US and the rest of the world. Those people or their groups crashed the US market and economy in the early 2000's.

ECB: Expected to cut its Euro Area growth outlook

OPEC: Warns of slower oil demand amid growing world economy risks

Asia: Longest stock selloff in 16 years.

This scares those who have a lot to lose. Just listen to the Financial Crisis clips CNBC and others are playing: their fear was that they lose what THEY had, with gratuitous references to the rest of the peons out there. Where the average US citizen wants the US to do better itself and vis- -vis the rest of the world, they do not.

Ah, and you don't hear this on the financial stations (2 of which of the big three are left leaning), but the US is doing what the fellow elected President said it would do: win. Now THAT is insightful, biting, and interesting commentary . . .

AAPL: Has its product unveiling. It is up a fraction ahead. Sometimes it fades after the announcement. We like it because technically it tested a breakout, held near support, started higher. That is good technical action regardless of lower prices for some phones, etc.

Chips: Bad gets worse. MXP downgraded by Steiffel. MU downgraded by GS. Talk about kicking a dog when it is down.

Now that everyone is downgrading, throwing in the towel downside on these, it could be that a bottom is forming. Will have to see how they react, but when everyone has sold, who is there to sell? Question is, will buyers return a bid? Important because SOX and chips are important to the market. Note SOX has not broken down yet, indeed, acting good in its triangle. That needs to stay the case or the market outside chips could start feeling the effects. As SOX goes, the market tends to follow.

PPI, Aug: -0.1 vs 0.2 exp vs 0.0 July

Core: -0.1 vs 0.2 vs 0.1

First decline since February 2017

I suppose this is Fed-Friendly

Bonds: 2.959 vs 2.979% 10 year

EUR/USD: 1.1588 vs 1.1604. Dollar bounces on weak ECB outlook for EU

USD/JPY: 111.26 vs 111.59

Oil: 70.01, +0.76

Gold: 1200.10, -2.10

Soft starts, as shown Tuesday, are not bad. Now we see if the bids pick up after a weaker open and how chips react to the downgrades on stocks already in the gutter.

Jon Johnson, Chief Market Strategist

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