Good morning. Happy Friday.
The Asian/Pacific markets leaned to the downside. Japan dropped 1.7% followed by Indonesia (down 0.6%) and Malaysia (down 0.5%). New Zealand moved up 0.3%. Europe is currently mixed, but only Greece (down 1.7%) has moved much. Norway, Stockholm and Prague are up; Austria is down. Futures here in the States point towards a moderate gap down open for the cash market.
The dollar is down. Oil is flat, copper is down. Gold and silver are down.
Today has the potential to be a huge volume day. Russell Investments (they own the Russell 1000, 2000 and 3000) will do their annual index realignment before today’s close. They rank stocks per market cap…the top 1000 become the Russell 1000…the next 2000 stocks become the Russell 2000…those two groups combined become the Russell 3000. This will require a lot spit swapping as stocks are moved from the 1000 to the 2000 (and vice versa) and from the 2000 completely out of the 2000 and 3000, etc. If a stock is falling out of the Russell 3000, it’s likely to drop today. If a stock is moving into the 3000, it’s likely to move up. Otherwise moving from one list to another shouldn’t change anything…although, again, volume could be very big.
We headed into this week with the S&P sitting near its all-time high and in the midst of a 6-day winning streak. Monday was a very small range day. Tuesday was a big down day, and Wednesday a pretty good up day. Thursday had something for everyone – a stiff sell-off early, then a rally. For the week most of the indexes are down a little…the Nas and Nas 100 are up. This isn’t bad considering the extent of the most recent move and the divergences between the market and several breadth indicators.
Overall I still like the market. The trend is up and solid, but in the near term things are still iffy. The divergences need to work themselves out. I remain neutral and can argue a move in both directions…the near term is not clear. How you trade this depends on your trading style. Short term traders can trade both sides of the market because their holding times are short. Longer term traders would be wise to not be overly aggressive entering new positions. Sometimes the market is clear, sometimes it’s not. Right now it’s not. More after the open.
Stock headlines from barchart.com…
Commercial Metals (CMC +0.78%) reported Q3 EPS of 20 cents, well below consensus of 29 cents.
Keurig Green Mountain (GMCR -1.92%) was upgraded to ‘Buy’ from ‘Hold’ at Argus.
Finish Line (FINL -3.32%) reported Q1 EPS of 28 cents ex-items, better than consensus of 21 cents.
Wells Fargo added Capital One (COF +0.19%) to its ‘Priority Stock List’ citing the rebound in revolving credit growth.
H.B. Fuller (FUL -5.59%) was upgraded to ‘Buy’ from ‘Hold’ at Deutsche Bank.
Citigroup reiterated its ‘Buy’ rating on Google (GOOG -0.46%) and raised its price target on the stock to $686 from $675.
Gazprom (OGZPY -0.34%) and Sasol (SSL +0.44%) were both downgraded to ‘Equal Weight’ from ‘Overweight’ at Barclays.
StubHub, an eBay (EBAY +0.30%) company, has renewed as the exclusive ticketing partner for ESPN and its digital properties through 2017.
Manitowoc (MTW +1.40%) jumped over 11% in after-hours trading after Relational Investors disclosed that it took an 8.5% stake in Manitowoc and is pushing for the company to split itself in two.
Nike (NKE +0.51%) rose 3% in after-hours trading after it reported Q4 EPS of 78 cents, better than consensus of 75 cents.
Intel (INTC -0.32%) was upgraded to ‘Market Perform’ from ‘Underperform’ at Bernstein.
DuPont (DD -0.18%) fell over 3% in after-hours trading after it said it sees Q2 EPS ‘moderately below’ $1.28, weaker than consensus of $1.46, and then lowered guidance on fiscal 2014 EPS outlook to $4.00-$4.10, below consensus of $4.30.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
9:55 Reuters/UofM Consumer Sentiment
3:00 PM USDA Ag. Prices
Notable earnings before today’s open: AZZ, CMC, FINL, KBH
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers