Before the Open (Jun 18)

Posted on by Jason Leavitt

Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly down with stiff losses. Taiwan posted a gain, but Japan, Hong Kong, South Korea, Malaysia, Indonesia, Singapore, Thailand and the Philippines posted losses. China was closed. Europe, Africa and the Middle East are currently mostly down. Poland, France, Turkey, Germany, the UAE, Denmark, South Africa, Finland, Switzerland, Spain and Russia are down 1% or more. Futures in the States point towards a big gap down open for the cash market.
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The dollar is down. Oil is up slightly; copper is down. Gold and silver are up. Bonds are up.
Overnight Stock Movers from barchart.com…
Disney (DIS +0.09%) was downgraded to ‘Sell’ from ‘Hold’ at Pivotal Research Group LLC with a price target of $93.
Global Payments (GPN -0.21%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman Sachs.
Dun & Bradstreet (DNB -1.33%) was downgraded to ‘Neutral’ from ‘Outperform’ at Baird.
Concho Resources (CXO -1.19%) was rated a new ‘Buy’ at Williams Capital with a price target of $178.
BlackRock (BLK +0.22%) was upgraded to ‘Buy’ from ‘Hold’ at Citigroup with a price target of $610.
Chevron (CVX -1.95%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Raymond James with a price target of $140.
Chubb (CB +0.60%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman Sachs.
Fleetcor Technologies (FLT +0.76%) will replace Time Warner in the S&P 500 index as Time Warner is dropped due to its acquisition by AT&T.
Splunk (SPLK -3.05%) was downgraded to sell from neutral by Citi with a price target of $98.
Manhattan Associates (MANH +4.02%) was upgraded to buy at Benchmark Co.
Evergy (EVRG +1.60%) was rated with a Buy on resumed coverage by Guggenheim with a price target of $58.
Cheesecake Factory (CAKE +5.47%) was downgraded to ‘Neutral’ from ‘Buy’ at BTIG due to valuation.
BHP Billiton (BHP AU) was downgraded to Hold by Investec.
Today’s Economic Calendar
10:00 NAHB Housing Market Index
1:00 PM Fed’s Bostic Speech
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings from Morningstar
this week’s Economic Numbers/Reports powered by ECONODAY

2 thoughts on “Before the Open (Jun 18)”

  1. The Fed continues to raise rates…. until something breaks. Well, the first signs of that are being seen and the Fed (as well as other central banks) seem intent on continuing their course. Note: social security and medicare are short of required funds for the near future – years yes, but short. Weak opening today, time to be fond of cash and watching silver/gold. Am I concered? You bet you!!!!!

  2. The Fed is increasing rates to avoid repeating the errors of the mid-Sixties, when it waited too long to snatch away the punchbowl, and let loose the Inflation Genie.
    Looking at the inflation rate if increase in the US, the genie is already out of the bottle – and a bond market crash is a huge risk.
    The ECB has no choice and has to reduce its bond purchases to zero by the end of the year, mainly because the northern “German” bloc are concerned that the euro could fall off a cliff if the ECB continues with QE while the FED continues to hike rates.
    The Bank of America says the ECB may bring forward the announcement to warn Italy’s Lega-Grillini insurgents that there will be no monetary cover for their fiscal blitz. So if the ECB no longer buys Italy’s bonds then who will? (Same goes for Greece, Spain, etc, etc…?)
    The end of QE in Europe is doubly treacherous because it rips away the ECB shield for Italy, meaning Mario Draghi’s “do whatever it takes” will no longer hold. The more immediate risk is that the US economy continues to decouple from the rest of the world in a Trumpian fiscal blow-off, catapulting the US dollar higher.
    The Bank for International Settlements estimates that offshore dollar debt – much of it borrowed by private companies in East Asia and Latin America – has jumped five-fold to $US11 trillion since the early 2000s. There is a further $US13 trillion in “equivalent” derivatives, three-quarters with a maturity of less than one year.
    The nub of the matter is that a surging dollar forces global commercial banks to retrench and causes a liquidity squeeze through complex swap and hedge contracts. It is a toxic cocktail when combined with surging US interest rates as well.
    Some $US9 trillion of global contracts are priced off dollar Libor rates. Emerging markets are now big beasts. The “blowback” from any crisis into the US economy would ultimately compel the Fed to retreat.
    https://www.theage.com.au/business/the-economy/a-worldwide-financial-storm-is-brewing-as-central-banks-pick-their-poison-20180618-p4zm36.html

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