Good morning. Happy Wednesday.
The Asian/Pacific markets closed mostly up. Japan, Australia, Indonesia, New Zealand, South Korea and Taiwan led the way. Europe is currently mixed; there are no standout winners or losers. London, Germany and Greece are down; Prague, Italy and Spain are up. Futures here in the States point towards an up open for the cash market.
The dollar is flat. Oil is down, copper is up. Gold and silver are up.
Has the market settled down? We got a moderate down day Monday and a much bigger up day Tuesday. All the indexes (except the Dow) are sitting at new all-time highs.
I’m sure the bears could search hard and find a chart that backs up their stance, but the reality is the market is super strong right now. Having an opinion and then searching for support of that opinion is a recipe for disaster. With a objective eye, listen to what the market tells you. Let that be your guide.
Two+ weeks ago several breadth indicators hit extreme levels. This was a sign the market was strong and likely to continue higher. That’s why I’ve been saying all along new highs are coming. I’m not that smart. I don’t have a crystal ball. I just listen to what the market tells me.
My biggest concern right now is the extent of rallies of several big cap leadership stocks.
Google has rallied from 850 to 1225 since October – a huge move from a big cap stock.
Facebook has rallied from 45 to 70 in three months.
Priceline has moved from 1100 to 1375 in one month.
Tesla has doubled from 125 to 250 in three months.
Netflix has moved from 325 to 450 in six weeks.
Wynn has rallied 50% from 160 to 240 in three months.
The list is long. Biotechs, airlines, aerospace & defense…all doing great.
Is Tesla going to double again? Is Facebook and Google going to rally another 50%. I highly doubt it. So in order for the market to keep going up, a new crop of stocks will need to step up and lead because it’s unlikely these stocks can continue their pace.
This is my biggest doubt…that so many stocks have rallied so much, I wonder how much is left in the tank.
Stock headlines from barchart.com…
Stifel keeps a ‘Buy’ rating on Facebook (FB +2.06%) after it raised its price target on the stock to $82 from $72.
Navistar (NAV +0.19%) reported a Q1 EPS loss of -$3.05, a much larger loss than consensus of -$1.77.
Dillard’s (DDS -0.75%) was downgraded to ‘Neutral’ from ‘Outperform’ at Credit Suisse.
Pandora (P +3.41%) was upgraded to ‘Neutral’ from ‘Sell’ at MKM Partners.
Staples (SPLS +0.07%) was downgraded to ‘Neutral’ from ‘Buy’ at B. Riley.
Boeing (BA +1.57%) was awarded a $1.16 billion government contract modification for full rate production of the AH-64E Apache helicopter, seventy-two remanufactured helicopter systems, ten new helicopter systems, and for and integrated logistics and support.
ABM Industries (ABM +4.25%) reported Q1 adjusted EPS of 25 cents, right on consensus, although Q1 revenue of $1.23 billion was below consensus of $1.24 billion.
Fairpointe Capital reported a 13.25% passive stake in Cooper Tire (CTB -0.65%) .
Systemax (SYX +4.19%) reported Q4 non-GAAP EPS of 15 cents, over double expectatios of 7 cents.
Smith & Wesson (SWHC +1.55%) jumped 10% in after-hours trading after it reported Q3 EPS of 36 cents, well above consensus of 29 cents, and then raised guidance on 2014 EPS to $1.39-$1.42 from $1.30-$1.35, higher than consensus of $1.33.
Castle Creek Capital reported a 7.75% passive stake in MBT Financial (MBTF -0.41%) .
Bob Evans (BOBE +1.55%) fell 5% in after-hours trading after it reported Q3 EPS of 30 cents, well below consensus of 57 cents, and then lowered guidance on fiscal 2014 EPS $1.60-$1.75, below consensus of $2.26, citing adverse winter weather that impacted restaurant sales.
Synta Pharmaceuticals (SNTA +4.88%) cancels out of conferences after the company announced that its CEO Safi Bahcall had resigned, effective immediately.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
9:00 PMI Services Index
10:00 ISM Non-Manufacturing Index
10:30 EIA Petroleum Inventories
11:00 Global Composite PMI
11:00 Global Services PMI
2:00 PM Fed’s Beige Book
Notable earnings before today’s open: ARQL, BF.B, CSIQ, END, FSS, HOV, INXN, LINC, MCGC, PETM, POZN
Notable earnings after today’s close: BIOL, BYD, CWST, ERII, GA, LHCG, LRE, SMTC, SN, SYNC, TCRD, VVTV, WX, ZGNX
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers
0 thoughts on “Before the Open (Mar 5)”
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Mar 6 is 5 years from 2009 bear low.
Mar 7 equals last bull market. Oct 10 2002 to Oct 11 2007.
Not many bulls exceed 5 years.
There are cycles of 62 months in Aussie market so a May sell and go away is possible.
Well, there was no “normal” retracement, so the up move was never threatened. In fact, every time the market dipped an iota, it was bought.
Overnight action was mellow and bullish. Lo was -3.75 and hi was +3.25 (same as y’day’s high) until just before the ADP report. Since then, futures have dropped down to nearly unchanged.
It’s possible to tap 1873 after the open. They can fade as low as 1872, and Tgt will be 1878.
If they break 1872 there are multiple levels of support, all with targets higher than yesterday’s high.
Since the futures overnight high was equal to yesterday’s high, that may offer resistance today. Above it, we are in uncharted and brand new territory.
LT tgt remains 1900.
Futures are +0.25 at 9 am.
the end of the world happened a few months ago as the dow and dji futures spike peaked and the euro top 50 put in a long term jaws of death broadening pattern
we are currently in rig o motis
europe ftse and dax and spx may have exhausted
leaving only the nas 100 with worms in the apples