Futures vs FV: SP -10.91; DJ -77.66; NASDAQ -28.72
Stock futures started the session lower, recovered to flat as the morning data came in. The past half hour they have turned back downside, still well over the morning lows but backsliding toward the open.
Not surprising back and forth action on the day following an FOMC decision. The market is trying to figure out what the Fed said, what Powell meant, and what that means near term.
David Tepper says it is clear: the Fed put is dead and cash is not so bad right now. Cramer hit the right notes this morning, the ones we have talked about for years: the little guy is FINALLY getting some wage gains back, some benefits to the bottom line after 10 years of crappy wages, crappy jobs, and now the Fed is taking away the ability to do so. He says 'the rich people won' because they had the money to be in the market and now they can buy 3.5% CD's and forget about it while the little guy is the one feeling the Fed's new-found sense of responsibility. I added the last part, but the paraphrase is pretty much on point.
Philly Fed, Dec: 9.4 vs 15.0 exp vs 12.9 Nov. There you go: the 'soft' data is no longer holding up as sentiment falls to lows, evidenced by the Philly drop to a 28 month low. Just another data point the Fed says it will look at apparently at some point in the future, just not right now when it is making decisions that will impact the economy several months down the road. There is a rule for the Fed, one no one really articulates so I will: You cannot put off looking at what the markets and economy are doing today for what you think they will do in 6 months. But it has and so, as always, it will be wrong and we will pay the price, not the Fed. It will still be an unelected institution with inordinate power to control our wealth, one that I just cannot find in the Constitution.
Earnings beats: WBA; ACN; BBRY; HRMN; RAD (BL)
Upgrades: HUM, PPG
BOE: Leaves rates unchanged given the vagaries of the Brexit attempt.
Bonds: 2.757% vs 2.762% 10 year
EUR/USD: 1.1452 vs 1.1383
USD/JPY: 111.60 vs 112.38
Oil: 46.89, -1.28
Gold: 1160.40, +4.00
The aftermath day and likely it won't end where it is starting this morning. The Fed put may be over as Tepper says, but the technical are oversold and the internals and sentiment are relatively extreme on average. VIX is not rising, however, so the market remains stumbling around. Will see what kind of bids can return.
Jon Johnson, Chief Market Strategist
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