Friday, March 01, 2019

Market Alert - Pre-Market

Futures vs FV: SP +17.91; DJ +164.00; NASDAQ +46.73

Futures gapped higher on the open and have held the range the entire morning. Obviously after the big volume surge Thursday on the last day of FEB, new money is coming in to start March.

The US economic data did not hurt or help, but better Chinese manufacturing data (after really weak import/export numbers Thursday) appeared to help the entire global market network. China is good at pumping in the stimulus and getting farther into debt. For that matter, the US is good at that. Europe as well.

Personal income and spending: two months of income out today but only one month of spending (government shutdown lingering effect).

Personal Spending Dec: -0.5 vs -0.2 EXP VS 0.6 PRIOR (O.4 NOV)
That is the biggest drop in spending in 9 years

Personal Income Dec: +1.0 vs 0.3 exp vs 0.3 NOV (from 0.2)

Personal Income Jan: -0.1 vs +0.3 exp vs 1.0 Dec.

Jan consumption: -0.5
Wages +0.5
Savings rate +7.6

Wow, the US saving that much? Makes the numbers highly suspect.

ISM still to come today along with Michigan sentiment.

Earnings as noted last night are pushing stocks mostly higher. SPLK, ZS FL are rallying. GPS rallying as it is splitting its company.

Trade: Reports are the US is preparing a 'final trade deal' for the meeting between Trump and Xi, and the idea is that most of the issues are worked out. Seems rather incredible, but if it is a good deal and they sign it, fantastic.

Canada GDP: down for the second straight month. Wow is Canada in recession?

Bonds: 2.734% vs 2.717%

EUR/USD: 1.1383 vs 1.1369

USD/JPY: 111.83 vs 111.40

Oil: 57.07, -0.15

Gold: 1306.90, -9.20

It would appear that weak income and spending data -- at least January income data -- is having no ill effect on stocks. Futures gapped higher for the new month and China manufacturing numbers (though, as always, anything from China is likely made up) and the data has not impinged upon the move. Maybe it is read as keeping the Fed surely at bay.

Moreover, the dream of a US/China trade deal gets puffed further after Larry Kudlow Thursday and this morning talks of a "remarkable, historic deal" after Lighthizer 'read the riot act' to China's Vice Premiere and the VP responded favorably. Kudlow is going to speak on Fox Business shortly.

Stock futures are breaking higher out of the morning range as the opening bell nears. The buying pressure is strong this morning and the indices are going to head back to try the resistance. We will see how they work when they get to that point.

ZS is trading nicely higher on its results, will likely take some gain there.

As for new positions, we will see how they survive this opening gap upside salvo and if we can get decent entries.
Jon Johnson, Chief Market Strategist

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