Before the Open (May 19)

Good morning. Happy Monday. Hope you had a nice weekend.
The Asian/Pacific markets leaned to the downside. Australia and China dropped more than 1%; India moved up more than 1%. Europe is currently mixed. Russia and Greece are up more than 1%; Italy is down. Futures here in the States point towards a down open for the cash market.

The dollar is down. Oil and copper are up. Gold and silver are up.
Last week the market started and ended the week strong, but the middle was weak. The indexes closed Friday close to where they opened Monday and somewhere near the middle of the week’s range…Doji’s formed. During the week, the Dow and S&P 500 hit new all-time highs while the Russell 2000 took out a previous low. Several indicators moved down for the week, and others, such as the SPX bullish percent index, are rolling over.
I could make the case the market’s next move will be up, but I highly doubt a move up will gather much momentum because there’s too much internal weakness. I can make a stronger case the market’s next move will be down. Lagging small caps, lagging growth stocks and a lagging Nasdaq along with the weakest internals in 12 months hint the path of least resistance is down. But the market hasn’t fallen yet, so you gotta wonder if it’s got something up its sleeve – at least in the near term.
The trading lists this week are so-so. We have equal number of longs and shorts, and most of them are simply decent, not great and not no brainers. My bottoms-up approach says this alone is reason to keep laying low. More after the open.
Stock headlines from barchart.com…
Deutsche Bank (DB +0.24%) was downgraded to ‘Underperform’ from ‘Neutral’ at BofA/Merrill.
Campbell Soup (CPB +0.20%) reported Q3 EPS of 62 cents, better than consensus of 59 cents.
AT&T (T +0.60%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Raymond James.
DirecTV (DTV) rose 4% in pre-market trading after AT&T agreed to buy the company for $48.5 billion.
Brean Capital raised its price target on Hewlett-Packard (HPQ +0.34%) to $40 from $34 and keeps its ‘Buy’ rating on the stock.
Valspar (VAL +0.07%) reported Q2 EPS ex-items of $1.07, higher than consensus of $1.04.
Broadcom (BRCM +0.68%) and Micron (MU +0.66%) were both upgraded to ‘Outperform’ from ‘Sector Perform’ at RBC Capital.
ATK (ATK +1.03%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman Sachs.
Genworth (GNW -0.95%) was downgraded to ‘Underweight’ from ‘Equal Weight’ at Morgan Stanley.
Deutsche Bank raised its price target for Oracle (ORCL -0.57%) shares to $48 from $45 and keeps its ‘Buy’ rating on the stock.
Abbott (ABT -0.46%) was upgraded to ‘Outperform’ from ‘Neutral’ at Credit Suisse.
Fossil (FOSL +1.02%) was upgraded to ‘Hold’ from ‘Sell’ at Brean Capital.
Abrams Capital reported a 6.26% passive stake in Barnes & Noble (BKS +1.85%).
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
No events scheduled.
Notable earnings before today’s open: CPB, VAL
Notable earnings after today’s close: PLAB, PWRD, URBN
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers