Futures vs FV: SP -6.91; DJ -14.43, NASDAQ -29.08
Futures sluggish all morning but off the 6:30ET lows as the market suffers a mild hangover from the WED Powell-induced upside surge. The market was set to bounce, was bouncing, and Powell set the fuel on fire.
Interestingly, it was likely a stroke of genius by Powell. Trump complained the Fed was the cause of the market and economic issues that the slowing data is showing. So, after the public attacks on him, Powell cited the slowing data, said it would be prudent to view the Fed as near neutral, indicating not much more if any hiking. He has taken the Fed out of the picture and people will now view the economic moves vis a vis the administration.
Personal Income, Oct: 0.5 vs 0.4 exp vs 0.2 prior.
Spending: 0.6 vs 0.4 vs 0.2 (from 0.4)
PCE 0.2
Core: 0.1 vs 0.2 expected; 1.8% year/year. Core PCE slowed.
Jobless claims: 234K vs 218K exp vs 224K prior. 8 month high. Has the trend lower been broken? This is now like sentiment: the moves at the extremes are what is important. Jobless claims clearly at extreme lows and now showing a potential break. GM laying off 15K, Ford struggling and my lay off as well.
Earnings beats: EXP; ANF; BOX
Misses: DLTR (TL); GES (BL)
Upgrades: MCD; BA
Downgrades: AAPL
OTHER MARKETS:
Bonds: 3.031% vs 3.061%
EUR/UAD: 1.137 vs 1.1367
USD/JPY: 113.32 vs 113.65
Oil: 51.18, +0.89
Gold: 1226.10, +2.50
Looks as if the market is going to give a bit of that pullback discussed last night, but as the open approaches that pullback is dissipating. DJ futures were -50+ a half hour ago and now are -15. The bids are returning on the dip and not sure if we get much of a shot at lower prices but we will see what the market gives us.
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Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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