Before the Open (Nov 3)

Good morning. Happy Monday. Happy November.
The Asian/Pacific markets closed with a lean to the downside. China, Singapore and New Zealand moved up; Australia, South Korea and Hong Kong moved down. Europe currently leans to the downside. Italy is down 1.1%, followed by Belgium (down 0.95%), Prague (down 0.78%), Switzerland (down 0.65%), Amsterdam (down 0.64%) and France, Germany and London (down 0.6% each). Greece is up 1.8%, and Amsterdam is up 0.5%. Futures here in the States point towards a down open for the cash market.

The dollar is up. Oil and copper are up. Gold and silver are down.
I don’t have anything to add to the report published over the weekend. The trend is up…most key groups are doing well…the indicators support the strength…the market is in good shape. Absent a major external event, the strength should continue, even if things get a little more choppy.
In the near term, the market is due for a rest or pullback. When the indicators move to extreme levels, two things tend to happen. 1) The market rests and 2) the trend continues and new highs are made. Here’s an example. The chart below is the percentage of SPX stocks above their 20-day EMA (smoothed with a 3-day MA). Each time the indicator moved to the mid-80’s, a pullback followed and the market’s vertical move slowed, but a market top wasn’t put in place for a couple weeks and new highs were eventually hit. High prints from such indicators are a sign of strength, which tends to continue, not a sign of a blow-off top.

Stock headlines from barchart.com…
Loews (L +1.16%) reported Q3 EPS of 56 cents, well below consensus of 68 cents.
Home Depot (HD unch) was downgraded to ‘Market Perform’ from ‘Outperform’ at Raymond James.
Newmont Mining (NEM -7.72%) was downgraded to ‘Hold’ from ‘Buy’ at BB&T.
Barrick Gold (ABX -3.42%) was downgraded to ‘Hold’ from ‘Buy’ at Deutsche Bank.
TD Ameritrade (AMTD +1.90%) and BlackRock (BLK +2.36%) were both upgraded to ‘Buy’ from ‘Neutral’ at Citigroup.
Facebook (FB +1.19%) was initiated with an ‘Overweight’ at Morgan Stanley with a price target of $90.
LabCorp (LH +1.77%) will acquire Covance (CVD +0.72%) for approximately $5.6 billion.
Royal Gold (RGLD -4.18%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs.
American Tower (AMT -1.42%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman.
Sohu.com (SOHU +6.09%) reported a Q3 EPS loss of -61 cents, a much smaller loss than consensus of -$1.14.
Crown Castle (CCI -6.15%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs.
BAE Systems (BAESY +1.52%) was awarded $141.8 million government contract modification to provide the U.S. Army with 18 Self-Propelled Howitzers and 18 Carrier Ammunition Tracked vehicles.
Abingworth reported a 13.5% stake in Proteon Therapeutics (PRTO unch) and RA Capital reported an 8.3% passive stale in Proteon Therapeutics.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
Auto sales
8:30 Gallup US Consumer Spending Measure
8:58 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
11:00 Global Manufacturing PMI
Notable earnings before today’s open: ACW, ALE, AMG, AMH, ANIP, ARCB, ARE, ARNA, BWP, CHD, CNA, CYOU, EEP, GVA, HAE, HNT, INN, ITG, KRG, L, MCY, MNKD, NSP, S, SNH, SOHU, SYY, USAK
Notable earnings after today’s close: ACXM, AEIS, AGU, AIG, AMTG, ANV, APL, BDE, BKH, CHGG, CKP, CRK, CUTR, CVD, CXW, CYH, DXPE, EGAN, ELNK, ENH, EOX, EPAM, EQC, FN, FTR, GALE, GRT, GTY, HLF, IART, ININ, KAMN, KBR, LCI, MCEP, MDU, MR, MRO, NBIX, NLS, NOR, NTRI, OGS, OTTR, PKT, PL, PLOW, PQ, QLYS, RBC, REG, RKT, RKUS, RLD, RTEC, SALE, SBRA, SGY, SKH, SNHY, SRC, SSW, SUP, TDW, THC, TXRH, VNO, VNR, WTR, Y
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers