Before the Open (Dec 2)

Good morning. Happy Friday. Happy Employment Numbers Day.
The Asian/Pacific markets closed mostly down. Australia, India and Hong Kong dropped more than 1%; China, South Korea and Taiwan were also weak. Indonesia did well. Europe is currently mostly down. Germany, France, Belgium, the Netherlands, Greece and Italy are down more than 1%; Austria, Norway, Sweden, Switzerland and Spain are also weak. Futures in the States point towards a down open for the cash market.
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List of Indexes and ETFs – here
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The dollar is flat. Oil and copper are down. Gold is up; silver is down. Bonds are up.
The emoplyment numbers are the last major data to be released before next week’s FOMC meeting. Here they are…
unemployment rate: 4.6% (was 4.9% last month)
nonfarm payrolls: +178K
private payrolls:
average workweek:
hourly wages: up
labor participation rate:
September and October job gains both revised down by 2000.
In the past good news was bad news because it increased the odds the Fed would raise rates. Now a rate increase is a virtual guarantee, so good news is actually good news – it signals things in the country are going well.
The headline number (the employment rate drops from 4.9% to 4.6%) is possible because several hundred thousand left the work force. It still counts. A little improvemnt here, a little improvement there. These numbers get revised several times and don’t become official for about six month. Still they hint at things.
S&P futures dropped a little after the news.
After 15 straight up days, the Russell 2000 will try to avoid a 5-day losing streak this week. Overall I like the market, but I’m concerned big-cap tech stocks are so weak. It’s not just that Apple, Amazon, Google, Intel, and Alibaba are weak; they’re moving down under their 50-day moving averages. Purely from a technical standpoint, their weakness doesn’t seem to be temporary. Can the market move up without these stocks? It’s doubtful it can move up much.
Stock headlines from barchart.com…
Lululemon Athletica (LULU -0.81%) was downgraded to ‘Sell’ from ‘Hold’ at Canaccord Genuity with a 12-month target price of $44.
Starbucks (SBUX +0.93%) dropped over 3% in after-hours trading after CEO Howard Schultz stepped down as CEO and Lieutenant Kevin Johnson will take over effective April 3, 2017.
Five Below (FIVE +1.32%) jumped over 10% in after-hours trading after it raised guidance on the low end of its full-year EPS view to $1.29-$1.32 from a prior view of $1.28-$1.32.
Ambarella (AMBA -0.21%) fell over 5% in after-hours trading after it said it sees Q4 revenue of $84 million-$87 million, below consensus of $90.3 million.
Fairmont Santrol Holdings (FMSA -1.14%) slid nearly 5% in after-hours trading after it announced a secondary offering of 15 million shares of common stock.
Ulta Salon (ULTA -0.81%) jumped over 6% in after-hours trading after it reported Q3 EPS of $1.40, better than consensus of $1.38.
Exxon Mobile (XOM -0.07%) was rated new ‘Market Perform’ at BMO Capital Markets with a target price of $78.
Zumiez (ZUMZ -1.01%) fell 2% in after-hours trading after it reported Nov comparable sales up +5.7%, weaker than estimates of +9.7%, and then said it sees Q4 EPS of 60 cents-66 cents, on the low side of estimates of 65 cents.
Equinix (EQIX -2.76%) was rated a new ‘Buy’ at Guggenheim Securities with a 12-month target price of $390.
SM Energy (SM +0.78%) slid nearly 4% in after-hours trading after it announced a public offering of 8 million shares of common stock.
Allegheny Technologies (ATI +1.25%) declined 3% in after-hours trading after it said it will suspend its quarterly dividend effective immediately.
Smith & Wesson Holdings (SWHC +2.79%) dropped 6% in after-hours trading after it lowered guidance on Q3 adjusted EPS to 52 cents-57 cents, below consensus of 61 cents.
CyrusOne (CONE -4.17%) was rated a new ‘Buy’ at Guggenheim Securities with a 12-month target price of $50.
Student Transportation (STB +1.58%) was rated a new ‘Outperform’ at Raymond James with a 12-month target price of $6.50.
Today’s Economic Calendar
8:30 Non-farm payrolls
8:45 Fed’s Reserve Gov. Lael Brainard speech
12:30 PM Daniel Tarullo speech
1:00 PM Baker-Hughes Rig Count
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers