Wednesday, November 07, 2018

Market Alert - Pre-Market

Futures vs FV: SP +20.50; DJ 182.99; NADSAQ +68.15

Elections are a certainty, relative gridlock in Congress, stocks gapping upside in . . . relief? Certainty is a key factor but no one is just how certain things will play out from here.

Not a worry for today, however, at least at the open, as stocks will gap higher. It is one of those days where futures gapped upside at the open and have held in the same range all morning. Those can have give backs, and with the Fed STILL an issue, you have to be cognizant of that.

That said, the indices set themselves up fairly well going into the elections and perhaps tis session can provide the follow through session to that reversal day on 10/30.

Earnings beats: DATA, DISH, KORS, HUM, MTCH

Misses: DF (BL); PZZA (TL, BL); Z (BL); RRGB (TL); TRUE (TL, BL); Go-Daddy (BL)

Mortgage Apps: -4.0 vs -2.5%. Four year low on applications.

Macron: Calls for a European army to protect Europe from China, Russia, and . . . the USA. Perhaps the EU needs to worry more about saving itself from within.

AMZN: 2 headquarters are planned as previously reported, one being in NY, the other possibly near Dallas. The cities that bid are all saying they would have offered differently if they new it was for just HALF of what AMZN said it would be. Yes, that makes sense. Many also said why not just make business climates more conducive than having this deal by deal ruleset given for certain businesses and not others. Makes a lot of sense.

BONDS: 3.199% vs 3.222% 10 year. Bonds rally some post-election.

EUR/USD: 1.1485 vs 1.1417

USD/JPY: 113.20 vs 113.45

Oil: 62.79, +0.58

Gold: 1233.20, +5.90

Okay, now we get set for . . . 2020 elections. Just when you could breathe easier you would not be pelted with political ads and 24-hour news coverage, this morning they are already discussing 2020. Help us all.

The lay of the land has not changed a whole lot in terms of leadership -- the same stocks that had good bases still have the good bases while others are more or less rebounding. If there is follow through, leadership is still the ultimate issue as there have to be enough stocks that can sustain moves and continue adding to them.

All the talk is about the election and the election to come, but the more germane issue for us is whether the gap higher can hold and show a follow through session to the rebound that started 10/30. We are watching to see what stocks give us some decent entries if this move does indeed hang on.

Jon Johnson, Chief Market Strategist

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