Market Alert - Pre-Market

Futures vs FV: SP -8.52; DJ -56.50; NASDAQ -57.07

DJ30, SP500 paying for the success last week as their futures are lower to start the FOMC decision week. 4 hikes this year or less? More after the number the FOMC has already said it envisioned? Questions about a recession to come, the trade war versus the US' lead over the rest of the world. The market needs to know as it knows the Fed is the big factor in the background and typically holds course too long.

NASDAQ is the weakest pre-market, continuing the weakness from last week that has its big names testing key support at the 50 day MA. AAPL analysts were surprised to see unexpected lines for the new iPhone. Wow, could analysts be wrong? Ask the Fed about being wrong . . .


M&A: Sirius buying Pandora. Barrick Gold buying Rangold.


Trade: $200B in additional US tariffs on China kicked in this morning in 'Phase II' of the tariffs.

China said it would not negotiate under pressure and cancelled this week's planned renewal of talks with the US. Okay, it would not negotiate WITHOUT pressure either so what is it going to be? Reminds me of an old 'Bob Newhart' show when they were drunk watching a football game and were ordering Chinese food. Mr. Carlin said he wanted sweet and sour and a drunken, irritated Bob told Carlin to 'make up your mind!'

China also released a lengthy white paper explaining how it was the voice of reason in the trade negotiations, how it was an emerging economy and the US a mature economy with natural differences they had tried to work out for 40 years but now the new administration is upsetting that work. Work? As I said, China is upset because it is no longer really emerging and must act accordingly, but it does not want to and is angry the US is calling China on it and wants parity.

What does this mean? There is a long way to go with this trade 'skirmish' because China refuses to see itself as the rest of the world sees it, and as with an alcoholic, until he admits it he won't change. So for now China continues its charade.


Housing: BAC calls the housing peak. Okay, as we noted last week, housing naturally peaks as a recovery matures and interest rates rise. This is no major revelation.


OTHER MARKETS
Bonds: 3.074% vs 3.066%

EUR/USD: 1.1755 vs 1.1749

USD/JPY: 112.83 vs 112.56

Oil: 71.82, +1.04

Gold: 1203.3, +2.00


Futures continue to wane toward the open. DJ30, SP500 test after new highs Friday, NASDAQ is proportionately worse in the pre-market as the names struggle again. As noted, how they perform at their 50 day MA tests tells the tale. There can be false breaks lower that then lead to rebounds; can be. How they close today will be a big part of the equation.

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Jon Johnson, Chief Market Strategist
InvestmentHouse.com

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