Futures vs FV: SP -12.88; DJ -139.51; NASD -26.77
A day after the market surged in response to the FOMC uber dove stance, stocks are set to gap lower as a raft of negative economic data is the focus.
You would think the end is near, the end is near, the end is near. The doomers are really ramping up their rhetoric with descriptors such as 'collapse,' 'craters,' 'brick wall.' Yes, the end must be near.
There are bad signs for sure.
German PMI reads 44, the third straight month below 50. Definitely contraction.
Japan output falls to a 3 year low.
Yield Curve: 3 month treasury yields higher than the 10 year for the first time since 2007. NY Fed says the 3mo/10yr pair is as good as the 2yr/10yr pair in predicting recession. Well, I am not sure about that, but the curve definitely has changed shape the past few months with a big bow lower from the very short term bonds to the mid levels.
Other news is not that great, allowing for piling on:
NKE sandbags results
Misses: TIF (BL); CTAS (TL)
Beats: HIBB, NKE (BL)
Upgrades: BBY, CMG (really? at this point?)
BA: $6B Indonesian order cancelled.
Trade: Xi in Italy in an 'in your face move' to the US.
Futures are at the morning lows and stocks will gap lower. We will see if bids return after a 'deluge' of data showing 'collapse, cratering' and end of the world kind of stuff. Not really as bad as the open will suggest, but we will see if the bids want to return on this Friday.
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Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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