Before the Open (Aug 1)

Posted on by Jason Leavitt

Good morning. Happy Friday. Happy Employment Numbers Day.
The Asian/Pacific markets closed down across-the-board. Australia, India and New Zealand dropped more than 1%. Hong Kong, China and Singapore also did very poorly. Europe is currently down across-the-board. Germany, London, Spain, Austria, Belgium, Amsterdam, Norway, Sweden, Russia and Greece are all down at least 1%. Prior to the employment numbers release, futures here in the States pointed towards another big gap down open for the cash market.

The dollar is flat. Oil and copper are down. Gold is up slightly, silver is down.
The uptrend is officially over. The market has been iffy for a while. I’ve been conservative and advising everyone to adjust their trading and be content with small gains. Little by little over the last month the market deteriorated, but with the Dow and SPX trading near their highs last week, I held out calling a top. The trend had been up for so long, I wanted to give the bulls the benefit of the doubt. No more. Many stocks had already broken down; now the indexes are broken. There will be rallies (the market’s biggest up days occur within downtrends), but for now the path of least resistance is down. I’m not saying we’re headed for a bear market, but a correction that lasts more than a week or so should be in the works.
Here are the employment numbers…
unemployment rate: 6.2% (was 6.1% last month)
nonfarm payrolls: +209K (+235K was forecasted)
private payrolls:
average workweek: unchanged 34.5 hours
hourly wages: up 1 cents to $24.45
labor participation rate drops to 62.9% (was 62.8% last month)
May revised up from 224K to 229K.
June revised up from 288K to 298K.
On the news, S&P futures went from being down 10 to down 3.
Stock headlines from barchart.com…
Procter & Gamble (PG -1.07%) reported Q4 EPS of 95 cents, better than consensus of 91 cents.
Live Nation (LYV -2.68%) reported Q2 EPS of 11 cents, below consensus of 15 cents.
Boyd Gaming (BYD -2.40%) reported Q2 adjusted EPS of 5 cents, weaker than consensus of 8 cents.
DaVita (DVA -1.23%) reported Q2 adjusted EPS of 95 cents, stronger than consensus of 89 cents.
Insight Enterprises (NSIT -4.47%) reported Q2 EPS ex-items of 74 cents, better than consensus of 72 cents.
ON Semiconductor (ONNN -2.84%) reported Q2 EPS of 20 cents, better than consensus of 19 cents.
Fluor (FLR -2.89%) reported Q2 EPS of $1.02, higher than consensus of 99 cents.
Mohawk (MHK -1.54%) reported Q2 EPS ex-items of $2.21, better than consensus of $2.20.
Genpact (G -0.17%) reported Q2 adjusted EPS of 27 cents, better than consensus of 26 cents.
Montpelier Re (MRH +0.10%) was downgraded to ‘Hold’ from ‘Buy’ at Deutsche Bank.
Tesla (TSLA -2.46%) climbed 4% in after-hours trading after it reported Q2 EPS of 11 cents, nearly three times consensus of 4 cents.
Western Union ({=WU reported Q2 EPS of 36 cents, right on consensus, although Q2 revenue of $1.41 billion was slightly below consensus of $1.42 billion.
Outerwall (OUTR +2.40%) reported Q2 core EPS of $1.42, higher than consensus of $1.36.
LinkedIn (LNKD -3.55%) jumped over 5% in after-hours trading after it reported Q2 adjusted EPS of 51 cents, better than consensus of 39 cents, and then raised guidance on fiscal 2014 adjusted EPS to approximately $1.80, higher than consensus of $1.64.
Expedia (EXPE -2.77%) rose over 4% in after-houre trading after it reported Q2 EPS of $1.03, much higher than consensus of 76 cents.
Edison International (EIX -1.76%) reported Q2 adjusted EPS of $1.08, well above consensus of 83 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
Auto sales
8:30 Nonfarm payrolls
8:30 Personal Income and Outlays
9:45 PMI Manufacturing Index
9:55 Reuters/UofM Consumer Sentiment
10:00 ISM Manufacturing Index
10:00 Construction Spending
11:00 Global Manufacturing PMI
Notable earnings before today’s open: ALE, ARNA, AXL, BKW, CBM, CBOE, CHD, CLX, CPN, CVX, ENB, GVA, GWR, HCN, HLT, HPY, HTCH, IMGN, KCG, MGI, MT, NGLS, NSP, OMG, PG, PNM, RUTH, SPR, TDS, TESO, THRM, USM, WETF, WY, XLS
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Aug 1)”

  1. It’s about time we get some type correction! will provide some good setups for Longs in the coming months.
    Until then, enjoy playing short! 🙂
    Thanks Jason

  3. Written at 9 am, seems to be in line with Jason’s comments:
    Overnight the futures were positive until early AM, when they broke Thurs’ low
    and went to -14.50. They have found support at a layer I mentioned late Thurs afternoon, 1911 ES, which equates to roughly SPX 1916.5-1917.
    In response to the big jobs report at 830, they bounced to “UNCH” immediately after the report.
    Trying to ID the layers of resistance above is tedious, so let’s focus on a main level: 1940. Bulls can can get there, but it’ll take some doing.
    Futures are -4.00 at 9 am. Bonds bearish.
    This is a day to observe. Bears start the day in charge, and even though I expect a bounce back, that will not mean that the bulls are in control. If they want to take control, they need to show it.

          1. Forget SPX 1940 for now, they need to get above 1921-23 pretty quick or this will be vurry ugggly.

          5. That high just a few minutes ago SPX 1929.15 was held down by a moving avg. Above is bullish, below is bearish.

          8. Jim, with futures, at least in my experience, 5 mins is as high as I’ll go. I’ll look at 15, hourly and daily for the big picture, but when trading and looking for trend changes, need to see it as soon as you can. 5 mins suits me best.

  6. the gross selling comes in at 11.30 am to high noon–Europe close
    telling us this is carry trade closing positions
    then the fed takes over and the boyz finish it off
    as chief running bear ,I plan a turn around spx 1900 then a wave 2 bounce to 1970ish for a lower high,thus setting up a crash situation
    until the boyz loose control then the bears are in danger

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