Before the Open (Apr 6)

Good morning. Happy Thursday.
The Asian/Pacific markets closed mostly down. Japan lost more than 1%; Hong Kong and Taiwan were also weak. Europe currently leans to the downside but is little changed. Germany, Spain and France are up. The UK, Norway, the Czech Republic, Poland, Turkey and Russia are down. Futures in the States point towards a flat open for the cash market.
The dollar is flat. Oil is up, copper down. Gold and silver are up. Bonds are mixed.
Yesterday highlighted how sensitive the market can be to Fed talk. FOMC minutes revealed a desire to start shrinking the Fed’s $4.5 trillion balance sheet. This would take the form of not repurchasing matured securities and not re-investing dividends. Without this big buyer standing there as a buyer of last resort, it’s believed rates will move up quicker than expected. While this action shouldn’t be a surprise (it had to happen eventually), it could happen sooner than expected.
Also mentioned in the minutes was the high valuation of stocks, which confirms something I’ve said all along. The Fed claims they have a dual mandate – inflation and employment. But I’ve always said they also look at the stock market and world events to guide their decisions. If the Fed is worried about stocks being too high, there will certainly be less resistance raising rates.
The indexes are range bound, and there isn’t much to get overly excited about. Don’t force things right now.
Stock headlines from barchart.com…
Medtronic PLC (MDT -0.47%) gained almost 2% in after-hours trading after Reuters reported that it was close to selling its medical supplies unit to Cardinal Health for $6 billion.
Jazz Pharmaceuticals PLC (JAZZ -1.79%) climbed over 4% in after-hours trading after it settled a lawsuit with Hikma that grants Hikma the right to sell an authorized generic version of Xyrem in the U.S. starting January 1, 2023.
Yum China Holdings (YUMC +0.79%) rallied nearly 10% in after-hours trading after it reported Q1 comparable sales unexpectedly rose 1%, better than consensus of -2.4%, and reported Q1 revenue of $1.28 billion, higher than consensus of $1.27 billion.
TD Ameritrade (AMTD -2.06%) was upgraded to ‘Buy’ from ‘Neutral’ at Buckingham Research Group with a 12-month target price of $48.
Cardinal Health (CAH +0.14%) was upgraded to ‘Outperform’ from ‘Inline’ at Evercore ISI with a 12-month target price of $91.50.
Teladoc (TDOC +1.41%) was downgraded to ‘Neutral’ from ‘Overweight’ at Cantor Fitzgerald with a 12-month target price of $27.
OZ Minerals (OZMLF -8.26%) was downgraded to ‘Sell’ from ‘Hold’ at Morningstar.
Bed Bath & Beyond (BBBY -3.03%) rose nearly 3% in after-hours trading after it reported Q4 EPS of $1.84, above consensus of $1.77.
Resources Connection (RECN -1.53%) dropped 9% in after-hours trading after it reported Q3 EPS of 9 cents, below consensus of 14 cents.
8Point3 Energy Partners LP (CAFD +0.92%) tumbled 14% in after-hours trading after it said it sees Q2 revenue of $14 million to $16 million, weaker than consensus of $16.2 million.
GoPro (GPRO unch) fell over 1% in after-hours trading after it offered $150 million of convertible senior notes due 2022 in a private placement.
Colony Northstar (CLNS -0.53%) lost nearly 2% in after-hours trading after a person familiar with the matter said a 21.9 million share block of Northstar shares were being offered at $12.65 to $12.70 via Morgan Stanley.
Synacor (SYNC +1.22%) slumped 6% in after-hours trading after it announced a proposed public offering of common stock, although no size was given.
Wednesday’s Key Earnings
Bed Bath & Beyond (NASDAQ:BBBY) +4.5% AH topping expectations.
Monsanto (NYSE:MON) +1% after positive guidance.
Walgreens (NASDAQ:WBA) -1.6% in-line earnings, seeing Rite Aid (NYSE:RAD) deal closing soon.
Today’s Economic Calendar
Chain Store Sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Gallup Good Jobs Rate
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
4:30 Money Supply
4:30 Fed Balance Sheet
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings from Morningstar
this week’s Economic Numbers/Reports powered by ECONODAY