Before the Open (Mar 13)

Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly up. Hong Kong and South Korea rallied 1% or more; China and Taiwan also did well. Europe is currently mostly up, but movement is minimal. Russia and Poland are up more than 1%; the Czech Republic is also doing well. Turkey, Hungary and Spain are down. Futures in the States point towards a flat open for the cash market.
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The dollar is flat. Oil is down; copper is up. Gold and silver are up. Bonds are up.
There’s lots of stuff going on out there…and several things conflict.
The next FOMC meeting is Wednesday. Wall Street expects rates to increase.
But if rates are going up, wouldn’t the dollar be stronger than it is? It has dropped two straight weeks and closed Friday at its lowest level since February. Either the rate hike is priced in or the dollar doesn’t think rates will move up.
The large caps have been leading the small caps. This is something that is helped by a weaker dollar, so in a sense the out-performance has somewhat predicted the dollar pulling back.
Gold has fallen 9 straight days, presumably in anticipation of a higher rate…even though the dollar has been weak lately. The commodity’s reaction to Wednesday’s news will be very telling. If gold moves up, we con conclude the news is already priced in. If gold drops, it may be game over.
We don’t know what’s priced in, what is waiting for the Fed or what still needs to react. There are a lot of moving parts, and right now everything isn’t on the same page. There seems to be some disconnects and weird anomalies that need to be worked out.
This is a big week…not one I want to have a massive amount of short-term exposure in.
Stock headlines from barchart.com…
American International Group (AIG -0.21%) was downgraded to ‘Sell’ from ‘Hold’ at Deutsche Bank with a price target of $57.
Mobileye (MBLY +0.83%) surged 30% in pre-market trading after Intel was said to agree to buy the company for $63.54 a share or $15 billion.
Boeing (BA -1.04%) was downgraded to ‘Equal-Weight’ from ‘Overweight’ at Morgan Stanley.
Marvell Technology Group Ltd (MRVL +3.54%) was upgraded to ‘Buy’ from ‘Hold’ at Needham.
Gamestop (GME +0.72%) was downgraded to ‘Market Perform’ from ‘Outperform’ at Telsey Advisory Group.
Finisar (FNSR -22.69%) was upgraded to ‘Strong Buy’ from ‘Outperform’ at Raymond James with a 12-month target price of $40.
Rockwell Collins (COL +0.20%) was upgraded to ‘Overweight’ from ‘Equal-Weight’ at Morgan Stanley with a price target of $121.
Incyte (INCY +8.13%) filed a 34 million-share shelf on behalf of holder Baker Brothers Advisors.
Alexandria Real Estate Equities (ARE -4.30%) may move to the upside this morning when it was announced after the close Friday that it will be added to the S&P 500 before the open on Monday, March 20.
Raymond James Financial (RJF +0.10%) may move to the upside this morning when it was announced after the close Friday that it will be added to the S&P 500 before the open on Monday, March 20.
Advanced Micro Devices (AMD +4.35%) gained over 1% in after-hours trading when it was announced that it will be added to the S&P 500 before the open on Monday, March 20.
First Solar (FSLR -0.25%) fell over 1% in after-hours trading when it was announced that it will be removed from the S&P 500 and put into the S&P MidCap 400 before the open on Monday, March 20.
Kronos Worldwide (KRO -0.21%) jumped 9% in after-hours trading after it reported Q4 EPS of 20 cents, well above consensus of 6 cents.
Today’s Economic Calendar
10:00 Labor market condition index
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings from Morningstar
this week’s Economic Numbers/Reports powered by ECONODAY