Thursday, October 18, 2018

Market Alert - Pre-Market

Futures vs FV: SP -8.06; DJ -74.68; NASDAQ -19.38

Futures sluggish, trending slowly lower during the morning. This action defines sluggish, particularly on top of the WED pause/stall. After a bounce the past hour, futures are feeling pressure heading into the bell.

There are earnings, but it appears nothing today is working to fire up the buyers.

Fed: LOTS of Fed talk. Not good Fed talk, most of it coming from outside the Fed.

Hearing the late 90's, early 2000's mantra that led to the US market crash, eco crash, and the permanent loss of millions upon millions of tech jobs. That talk: 'it is not sustainable for one economy to outgrow the rest of the world economies as much as the US is doing.' This is the same talk/theory that led Greenspan to hike and hike rates and tighten and tighten money supply to the point the market choked, topped, and crashed. The fall was so hard that investment dried up for 3 years in the US and tech jobs by the millions migrated to Asia and elsewhere. By intentionally slowing the US economy to narrow the gap, the Fed destroyed the lives of millions and millions of US citizens. Just WHO is the Fed working for? It is NOT US citizens. Frighteningly, we are hearing this absurdly stupid 'logic' again and we have a Fed chairman who apparently believes it. All the while he gets kudos from former Fed members, e.g. Fischer.

Greenspan appeared on CNBC and said this was the tightest labor market he had ever seen. Oh great, the architect of the disastrous Fed policies of the late 90's and early 2000's is now on the air giving advice. On Greenspan's Fed was a fellow named Broaddus who actually said he WANTED more unemployment as the Fed hiked and hiked, tightened and tightened. That jerk got what he wanted, and again, it destroyed the lives and works of millions and millions of US citizens. News flash: these same kind of people are in charge now, pushing the same ideas, engaged in cognitive dissonance regarding their role in the prior collapse.

Why do they fear what we work so hard to achieve, i.e. lots of jobs? We finally adopt polices that gin up the US economic machine and the Fed does what it can to stop it for fear that someday, somewhere there may be inflation. It fears what it does not understand because its models that 'explain' what is happening are not workable models in the real world. So they see flowers blooming more than usual so they bring out the lawnmower to mow them down lest there be too many flowers and too much beauty and a bit more pollen.

At least Bullard said the Fed should not be raising rates when there is no inflation threat. But Bullard does not vote until next year, and he would not make a difference anyway.

China: -2.94% Shanghai exchange. Margin calls, liquidity panic. Too bad China. Perhaps you should change your ways and not steal, hack, and basically slime your way to a rising economy. Oh, your economy is not rising now and indeed many fear it collapses. Oh darn.

Earnings beats: TRV; BX; DHR; MO; AA; NUE

Misses: BK (TL); TXT (TL, BL); SNA (TL, BL)

Guidance upped: SAP

Counter with others warnings and really missing: GWW, PPG, Sealed Air, BMW, Daimler

Philly Fed: 22.2 vs 20.0 ex vs 22.9 Sept

Bonds: 3.198 vs 3.209

Oil: 68.74, -1.01

Gold: 1228.80, +1.40

Futures testing the session lows as the bell readies. A sluggish start after a sluggish WED. The market is still on a slow bounce so we will see if any bids come in to drive the indices such as NASDAQ closer to the 50 day MAs on this move. Also, still looking for a follow through but the action today does not look so follow-throughish thus far.

Jon Johnson, Chief Market Strategist

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