Thursday, January 03, 2019

Market Alert - Mid-Session

Another rollercoaster day -- surprise not. Stocks were off roughly 300 points when the ISM, December hit. Stocks plunged down 600+ points. In the past hour, however, they have recovered the ISM loss. Okay, back to -375 Dow points.

SP500 -38.22, -1.52%
NASDQ -123.11, -1.86%
DJ30 -455.22, -1.90%
SP400 -0.50%
RUTX 0.24%
SOX -4.48%
NASDAQ 100 -2.15%

Note RUTX is rising again, again leading the market: multinational woes appear to favor, thus far in a small way, the small caps.

ISM, Dec: 54.1 vs 57.8 vs 59.3.
Yes, the overall number shows expansion, but the miss magnitude is what 'woke' the algos and the selling. The report internals were not a rose garden.

New orders: 51.1 vs 62.1
Deliveries: 57.5 vs 62.5
Employment: 56.2 vs 58.4
Customer inventories: 41.7 vs 41.5 (not a good rise as it shows product stacking up and not being sold)

Again, not a horror story, but it is the trend and the rapidity of the decline. It fits the current 'economic slowing' meme in the face of a Fed that feels it is its duty to hike rates and drain the balance sheet. Kind of like Judge Smails in 'Caddyshack' sending the kids to the gas chamber: didn't want to do it -- felt I owed it to them.

Stocks recovered the jerk lower as noted, but that still leaves stocks down. Strongest? Some consumer products return from looking like a rollover, e.g. CLX. PG continues barely holding a gain when we want it to crash. VZ is up, retail is somewhat perversely higher.

Transports getting clobbered as are of course AAPL related stocks and tech in general.

Will see if the recovery off the ISM yank lower can build and cut the pre-ISM losses. Right now the market is taking a pause after that rebound.

Jon Johnson, Chief Market Strategist

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