Before the Open (Nov 19)

Posted on by Jason Leavitt

Good morning. Happy Tuesday.
The Asian/Pacific markets closed mixed. Malaysia, South Korea and Taiwan did well; Australia and New Zealand lagged. Europe is currently mostly down. France, Italy and Spain are down 1% or more. Futures here in the States point towards a gap down open for the cash market.

The dollar is down slightly. Oil is down, copper is up. Gold and silver are up small amounts.
Yesterday the market traded quietly in a tight range…until Carl Icahn said he was cautious on equities because so much of earnings have been due to low interest rates, not the companies themselves or management. Icahn is hot right now. Wall St. is listening/clinging to his every word, so the market immediately sold off on the news. The losses weren’t great, and at the end of the day, the closing numbers weren’t anything out of the ordinary. The question now is whether the selling pressure was just a short-term blip or if the bears have some legs.
Overall there isn’t much to dislike about the market. The indexes are in good shape. The groups are in good shape. Indicators are doing fine. The Fed isn’t going to raise rates or taper any time soon. Seasonality is favorable.
As I’ve stated a couple times recently, the most bearish observation I can make is that everyone and everything seems bullish, so you gotta wonder who is left on the sidelines to buy. Because absent buying, stocks can’t move up.
My stance remains the same…the trend is up.
Stock headlines from barchart.com…
Dick’s Sporting Goods (DKS +0.97%) reported Q3 EPS of 40 cents, better than consensus of 39 cents.
Best Buy (BBY -0.30%) jumped 3% in pre-market trading after it reported Q3 EPS of 18 cents, well ahead of consensus of 12 cents.
Valspar (VAL -1.09%) reported Q4 adjusted EPS of 97 cents, stronger than consensus of 92 cents.
Medtronic (MDT -0.41%) reported Q2 EPS of 91 cents, higher than consensus of 90 cents.
Campbell Soup (CPB -1.44%) reported Q1 EPS of 66 cents, well below consensus of 86 cents.
Home Depot (HD -0.45%) reported Q3 EPS of 95 cents, better than consensus of 90 cents.
Greenlight Capital reported that it lowered its stake in Einstein Noah (BAGL -3.28%) to 38.3% from 53.1%.
ING Group (ING -0.46%) said it will sell its 11.3% direct stake in Brazilian insurer SulAmérica to Swiss Re.
Salesforce.com (CRM -3.14%) fell 1% in after-hours trading after it reported Q3 EPS of 9 cents, right on consensus, but then gave guidance on fiscal 2014 EPS of 33 cents-34 cents, on the low end of consensus of 34 cents.
Brocade (BRCD +0.12%) reported Q4 adjusted EPS of 24 cents, well ahead of consensus of 18 cents.
Urban Outfitters (URBN -1.32%) reported Q3 EPS of 47 cents, better than consensus of 45 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
7:45 ICSC Retail Store Sales
8:30 Employment Cost Index
8:55 Redbook Chain Store Sales
2:15 PM Fed’s Evans: U.S. Economy and Monetary Policy
7:00 PM Bernanke Press Conference
Notable earnings before today’s open: AMAP, BBY, CPB, DAKT, DKS, DSX, HD, LEDS, LITB, MDT, QIWI, TJX, TSL, VAL
Notable earnings after today’s close: LZB
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Nov 19)”

  1. ES hit the tgt of 1801 early in the day (high was 1802) and pulled back on profit taking, accelerated by Icahn’s comment as Jason said. The result was hitting a solid support level at 1788 at 3:30 PM.
    As long as 1784 holds, the target projects to 1808.
    Resistance exists at 1794 up thru 1797.
    If bulls can’t break 1797, that gives a target at 1784 (the lower support level, and that may indicate a new trend: down).
    If bulls CAN break 1797, the target of 1808 is validated.
    Futures low overnight was -5.00 (SPX) and have now moved up to -1 with 30 mins to the bell.

  2. Jason is too nice. The Sonnet log wave analysis of price behavior on Wall Street suggests the US market is at or near a top as the exponential move in the Dow and S&p appear to be entering an unsustainable drive to a climax top. Moreover, there is an inverse head and shoulders under the bond yields 10,30 year treasuries. If this formation is to be trusted rates will in the next quarter or so, commence a move up in rates (and down in price) that will last 20 years in cycles history; and it will hurt equities if history is any indication. Today the broad market is fairly valued at a PE of 16+, but Small caps are at 17++ which is a caution. Finally, politics matters in the market, the President has shot himself in the foot as a leader and his commitments are no longer view as reliable. And he picked Dr. Yellen to head the Fed because she understand QEs importance to a modern, but broke, economy. Cheers.

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