Before the Open (Aug 2)

Good morning. Happy Friday. Happy Employment Numbers Day.
The Asian/Pacific markets closed mostly up. Japan rallied 3.3%; Australia, New Zealand and Taiwan also did well. India dropped 0.8%. Europe is currently mixed. Belgium, Switzerland and Greece are doing well; Amsterdam and Italy are lagging. Futures here in the States point towards a slightly up open for the cash market, but this of course will change.

The dollar is up. Oil is down, copper up. Gold and silver are down.
The market put in a relatively big up day yesterday, and all the indexes closed at a new high – some of them at all-time highs.
The Fed is out of the way. Now we have the employment numbers. Then news significantly slows down. There are still many earnings reports to be released, but it’s not likely those reports will influence the overall market. The dog days of summer are here. Traders go on vacations before kids go back to school. But this summer has not produced lethargic trading. We’ve had lots of movement, lots of trading opportunities.
Here are the employment numbers…
unemployment rate: 7.4% (was 7.6% last month)
nonfarm payrolls: +162K
private payrolls:
average workweek: 34.4 (down 0.1)
hourly wages: down $0.02 to $23.98
June payrolls was revised down from 195K to 188K
May payrolls was revised down from 195K to 176K
Futures moved down slightly on the news.
As stated yesterday, from here, I see one of two scenarios unfolding.
1) The market melts up. This means it goes up and up and up to the point where it makes no sense whatsoever and is totally illogical. The S&P can run 50-100 points in mass hysteria as shorts cover and on-the-sideline bulls who’ve been waiting for a pullback finally say “screw it” and get in.
2) We’ll get a blow-off top and false breakout. Tomorrow’s numbers will be good. The market will gap up and follow through (possibly for a day or two), and that will be it. The bears will quit; the bulls will be slobbering all over themselves; and a local top will be put in place. The long term uptrend will remain in place, but we’ll get enough of a correction to be painful for the bulls.
Stock headlines from barcharts.com…
CBOE Holdings (CBOE +1.40%) reported Q2 adjusted EPS of 54 cents, better than consensus of 51 cents.
Honda (HMC -0.51%) was upgraded to “Outperform” from “Neutral” at Credit Suisse.
Broadcom (BRCM +0.22%) was downgraded to “Neutral” from “Buy” at UBS.
Alliant Energy (LNT +1.45%) reported Q2 EPS of 59 cents, stronger than consensus of 55 cents.
GameStop (GME +1.88%) was downgraded to “Neutral” from “Outperform” at Credit Suisse.
Viacom (VIAB +2.18%) reported Q3 EPS of $1.29, weaker than consensus of $1.30, and also boosted its share buyback program by $10 billion to $20 billion.
Consolidated Edison (ED +0.72%) reported Q2 EPS of 59 cents, better than consensus of 57 cents.
Berry Plastics (BERY +1.26%) reported Q3 adjusted EPS of 35 cents, lower than consensus of 37 cents.
Lockheed Martin (LMT +1.71%) was awarded a firm-fixed-price governemnt contract woth up to $223.31 million for the procurement of Modernized-Target Acquisition Designations Sight pilot night vision sensors and related services.
MRC Global (MRC +1.23%) reported Q2 adjusted EPS of 43 cents, stronger than consensus of 38 cents.
Leap Wireless (LEAP -0.30%) reported a Q2 EPS loss of -$2.09, much weaker than consensus of -$1.12.
Activision Blizzard (ATVI +1.17%) reported Q2 EPS of 8 cents, better than consensus of 7 cents.
Intuit (INTU +0.89%) lowered guidance on fiscal 2013 EPS to $3.16-$3.18 vs. prior view of $3.31-$3.35.
LinkedIn (LNKD +4.52%) rose over 7% in after-hours trading after it reported Q2 adjusted EPS of 38 cents, better than consensus of 31 cents.
Kraft Foods (KRFT +0.99%) reported Q2 EPS ex-gain of 76 cents, stronger than consensus of 66 cents.
Earnings from seekingalpha.com…
Notable earnings before today’s open: ANR, AXL, BPL, CBOE, CHD, CVC, CVX, EAT, EGO, ETN, HST, IMGN, IT, LNT, NRF, OZM, PNW, POR, RUTH, SEE, TNP, UPL, VIAB, XLS
this week’s Earnings
this week’s Economic Numbers
today’s upgrades/downgrades