The market bolted out of the gate, but its drift set in largely as Facebook (FB) has come under even more pressure.  The social media giant, which placed ads in newspapers around the country, will have to do a lot more to prove to the public, and now the government, that it’s ready to do the right thing.

Shares were already sagging when news broke that the FTC has launched a non-public investigation into Facebook’s privacy practices:

“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers. Foremost among these tools is enforcement action against companies that fail to honor their privacy promises, including to comply with Privacy Shield, or that engage in unfair acts that cause substantial injury to consumers in violation of the FTC Act. Companies who have settled previous FTC actions must also comply with FTC order provisions imposing privacy and data security requirements. Accordingly, the FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook. Today, the FTC is confirming that it has an open non-public investigation into these practices.”

FTC

This as stories make the rounds of unauthorized access of Android user data and Pep Boys joining Elon Musk in abandoning Facebook.

Despite continued pressure on Facebook shares, technology is the second best performing segment of the market at this point of trading. 

Financials are enjoying the best outing thus far in today’s session, but they were hammered hard last week.  There continues to be a lack of leadership in the sector, which has been held back by action in the bond market rather than being propelled by the notion of three or more rate hikes.

Low’s is outpacing consumer discretionary names today as the shares are soaring on word the CEO is leaving.  It’s not the best sign for any executive when the announcement of their departure adds billions in valuation to the outstanding equity.

Economy Keeps Gaining

Donald J. Trump

‏The economy is looking really good. It has been many years that we have seen these kind of numbers. The underlying strength of companies has perhaps never been better.

This morning, President Trump tweeted about the economy, and he is spot on about the underlying strength.  We saw a share increase from NABE on GDP growth, coupled with lower unemployment estimates. 

Then, there’s the Chicago Fed National Activity Index, which climbed +0.88, well above consensus.  The move paced by:

• Sales
• Employment
• Production

Only personal consumption was slightly lower.

The Dallas fed report on manufacturing came in cooler than expected after a sizzling three month run.

Second Leg Higher

The market rally was losing steam, but more and more comments from China representatives on finding ways to avoid further trade tensions, including stopping forced joint ventures and wholesale theft of intellectual property, has helped lift it again.

Let’s see if Wall Street tries to pull the plug around 2PM – I don’t think they will today.