Monday, October 29, 2018

Market Alert - Pre-Market

Futures vs FV: SP +35.91; DJ +215.61; NASDAQ +103.60

Stock futures rose late Sunday and have steadily increased through the pre-market session. There is news acting as a trigger for a group of indices that were oversold and holding support levels.

M&A: IBM making a Hail Mary pass by acquiring RHT in a deal offering a 63% premium. After IBM's series of earnings reports the past few years it was clear it was swirling in the toilet. It is trying something new in what is almost a bet the farm move. The rest of the market likes it -- software looked to be the best set group to bounce after this leg of the selloff, and this news is helping that sector.

Personal Income: 0.2% vs 0.4% exp vs 0.4 prior (from 0.3). Slowest year/year since March.

Spending: 0.4% vs 0.4% exp vs 0.5 prior (from 0.3%). Slowest since May

PCE Core: 2.0% vs 2.0% prior

China: Reports it is considering lowering the tax on foreign autos by 50%.

EU: Merkel not running for reelection and thus will be through in 2021. After five terms she has to set the stage carefully for her succession. It is interesting because she may come close to being chancellor when the EU breaks apart. It's refusal to work with its third largest economy shows that it is not a union but a group controlled mostly by Germany and to a much lesser extent France. In other words, the EU does not represent the member countries but an oligarchy of globalists. The EU needs to break up. It has never accomplished the dreams when it was formed and its real legacy will be the elimination of many smaller European countries.

BONDS: 3.096% VS 3.079%

EUR/USD: 1.1363 vs 1.1402

USD/JPY: 112.33 vs 111.83

Oil: 67.31, -0.28

Gold: 1233.50, -2.70

Light on earnings this morning but will ramp up this evening and midweek. The financial stations are talking about this bounce in terms of 'if it can hold.' A CNBC anchor just said the trend is in 'jeopardy.' With the indices at support and some actual pessimism about this bounce's chances, it likely has a chance to hold.
Jon Johnson, Chief Market Strategist

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