Before the Open (Dec 16)

Good morning. Happy Monday. Hope you had a nice weekend.
The Asian/Pacific markets closed down across-the-board…China, Indonesia and Japan are down 1%. Europe is currently mostly up…Italy, Spain, France and Germany are up more than 1%. Austria and Belgium are down. Futures here in the States point towards a relatively big gap up open for the cash market.

The dollar is down. Oil and copper are up. Gold and silver are down.
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This is the market’s last full week of the year (the following two weeks are interrupted by Christmas and New Years). But we’ll get a pseudo interruption Wednesday for the next FOMC meeting. Two months ago I would have said it would be a non issue because the Fed wasn’t likely to taper right before the holidays, but things have changed. The employment data has improved, and there’s more chatter that the Fed may start the tapering process right now.
Tapering doesn’t mean an abrupt halt; it means a slight decrease that will start a process that takes at least a year. From a short term trading perspective, anything goes. The market won’t move solely based on what the Fed does, it’ll also move relative to expectations (is tapering priced in, etc). From a long term trading perspective, the market may need a couple months to realize tapering is going to happen, it’s not the end of the world and life will continue on without Fed assistance. Once tapering begins, a few good economic reports should put investor’s fears at bay.
The trend is up long term – it’s been like this for a long time, and it’ll take a while for this to change.
Short term the trend has been neutral for a couple weeks. Up, down…moves haven’t lasted. The breadth indicators have been weak or falling for a couple weeks, and while some have dropped to low-enough levels to support a bounce, others have more room to move.
New trumps the charts. I expect the market to trade slowly and quietly until Wednesday’s meeting.
Stock headlines from barchart.com…
Urban Outfitters (URBN -0.61%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman.
Twitter (TWTR +6.63%) was downgraded to ‘Underperform’ from ‘Market Perform’ at Wells Fargo.
Exxon Mobil (XOM -0.05%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman.
Marathon Oil (MRO -1.05%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman.
Jefferies kept its ‘Buy’ rating on Apple (AAPL -1.09%) and raised its price target for the stock to $650 from $600.
Old Dominion Freight Line (ODFL +1.76%) was upgraded to ‘Buy’ from ‘Hold’ at Deutsche Bank.
Conway (CNW +0.89%) was downgraded to ‘Hold’ from ‘Buy’ at Deutsche Bank.
General Dynamics (GD +0.41%) was awarded a $115.05 million government contract for engineering, development, and production efforts necessary to support the United States and United Kingdom Trident II Strategic Weapons Systems.
Lockheed Martin (LMT +0.76%) was awarded a $124.53 million government contract modification for the development and production of the common acoustics processing for Technology Insertion 12 through Technology Insertion 14 for the U.S. submarine fleet.
T-Mobile (TMUS +8.65%) is up over 9% in after-hours trading after the WSJ reported that Sprint (S +3.44%) is preparing a possible bid for T-Mobile U.S.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Empire State Mfg Survey
8:30 Productivity and Costs
9:00 PMI Manufacturing Index Flash
9:00 Treasury International Capital
9:15 Industrial Production
Notable earnings before today’s open: none
Notable earnings after today’s close: FCEL, RICK
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers