Before the Open (Dec 16)

Good morning. Happy Friday. Happy Quad Witching Day
The Asian/Pacific markets closed mixed and little changed. Japan, China and Singapore moved up; Hong Kong, Indonesia and Taiwan moved down. Europe is currently mostly up, but gains are small. Greece is up 2.1%; Austria, Norway, the Czech Republic, Hungary, and the Netherlands are also doing well. Futures in the States point towards a positive open for the cash market.
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The dollar is flat. Oil is up; copper is down. Gold and silver are up. Bonds are up.
If the market closes today where it is right now, most of the indexes will sport one of the smallest bodies on their weekly candlestick chart going back a few months. So despite this being Fed week, we haven’t gotten too much change between Monday’s open and today.
Options expire today. Not just stock options, also index futures, index options and stock futures.
I don’t see anything overly alarming with regards to the big picture. The trend is solidly up; volume has been very good; and longer term indicators are in good shape, meaning even if a top were to form, it would take several months for the indicators to lay the ground work.
In the near term there are a few warnings. Several indicators are starting to diverge from their underlying price action. If this remains the case, I can definitely see a correction in the next couple weeks. But until proven otherwise, I’ll be treating it like a correction within an uptrend – not something to short…something to buy.
Be patient with trades right now. We don’t have a huge list to work with. The market is resting. More after the open.
Stock headlines from barchart.com…
AvalonBay Communities (AVB -0.25%) was upgraded to ‘Buy’ from ‘Neutral’ at Mizuho Securities USA with a 12-month target price of $190.
Waste Management (WM +0.09%) boosted its quarterly dividend to 41.5 cents a share from 41 cents, and authorized a stock buyback of up to $750 million.
Scientific Games (SGMS +2.64%) was downgraded to ‘Neutral’ from ‘Outperform’ a Macquarie Research.
Adobe Systems (ADBE -0.67%) reported Q1 adjusted EPS of 87 cents, above consensus of 85 cents, although Q1 revenue of $1.625 billion was less than consensus of $1.65 billion.
Las Vegas Sands (LVS -2.63%) was rated a new ‘Buy’ at Goldman Sachs with a price target of $68.
Oracle (ORCL -0.05%) slid 2% in after-hours trading after it reported Q2 adjusted revenue of $9.07 billion, below consensus of $9.12 billion.
Jabil Circuit (JBL +0.33%) climbed 10% in after-hours trading after it reported Q1 core EPS of 69 cents, higher than consensus of 64 cents.
Finisar (FNSR +4.57%) dropped over 6% in after-hours trading after it proposed a $450 million offering of convertible senior notes due 2036.
Merck (MRK +0.92%) gained over 1% in after-hours trading after it won a $2.54 billion patent judgement against Gilead in Hepatitis C royalties. Gilead (GILD -0.21%) fell over 1% on the news.
Centene (CNC +1.96%) slid over 1% in after-hours trading after it said it sees 2017 adjusted EPS of $4.40-$4.85, lower than the consensus range of $4.56-$5.04.
Eagle Bulk Shipping (EGLE +16.83%) jumped 10% in after-hours trading after Goldentree, the second-largest holder of Eagle Bulk Shipping stock, entered into a pact to buy 2.5 million shares of the company’s stock.
Agios Pharmaceuticals (AGIO +5.33%) slumped 20% in after-hours trading after it ended development of its AG-519 drug for early-stage anemia after the FDA put the program on a clinical hold due to safety concerns.
Today’s Economic Calendar
8:30 Housing Starts
10:00 Atlanta Fed’s Business Inflation Expectations
12:30 PM Fed’s Lacker 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