Monday, April 01, 2019

Market Alert - Pre-Market

Futures vs FV: SP +20.75; DJ +218.38; NASDAQ +66.53

Stocks are set to gap higher at the open. Futures opened with a gap on news of the China PMI reading over 50 (50.5 vs 49.2 prior) for the first time since October 2018. Surely this data out of China is true and not some April Fool's joke. After all, the US tariffs remain in place, Europe economic activity continues to tank, but suddenly, as the US/China trade deal gets closer to resolution and China makes some half-hearted 'concessions' on IP transfer, China's economy turns the corner. Dubious.

Nonetheless, world markets are soaking it up. New money is coming to work on a new quarter, and it is being used to buy given the China numbers.

Futures gapped upside and have held the same tight range all morning. That is not the best action; preferred is the left to right build higher during the premarket. That said, new money is being pushed in so there is likely some staying power in the morning. Then we see if there are any who doubt the data a bit and if some profit taking comes in. Not going to call it selling; sellers are a very scarce lifeform in the market right now.

US data remains not great. The improvement a few weeks back is reverting.

Retail Sales, Feb: -0.2 vs +0.2 exp vs 0.7 prior (from 0.2)

Ex-Auto: -0.4 vs +0.3 exp vs 1.4 prior (from 0.0)

Hard to put a positive spin on this, but the market is ignoring it because China manufactured some manufacturing data.

Earnings beats: CALM

Upgrades: ATVI

Downgrades: WFC

Amazingly quiet Monday in terms of analysts.

Jobs: INTC laying off 'hundreds' of IT workers

Bonds: 2.437% vs 2.407%. Inversions remain at bay as world economics supposedly straightening out. With EU PMI's cratering and China making up a number to aid in trade negotiations? But, it is working for today . . .

EUR/USD: 1.1235, +0.0019

USD/JPY: 110.92, +0.08

Oil: 60.92, +0.68

Gold: 1299.20, +0.80

Jon Johnson, Chief Market Strategist

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