Before the Open (Dec 1)

Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly down. Hong Kong, Australia and Malaysia dropped more than 2%; Singapore, South Korea and Taiwan also dropped noticeably. Europe is currently mostly down. Italy, Austria and London are down more than 1%; Prague, Stockholm, Amsterdam, Belgium and Spain are down noticeably. Russia is up almost 4%. Futures here in the States point towards a moderate gap down open for the cash market.

The dollar is down. Oil is up (after having been down about 2.5 overnight) and copper is down. Gold and silver are down (but are well off their lows).
The big items as the new week starts are: 1) How were retail sales over the weekend, 2) Will the drop in oil continue, and to much lessor extent 3) What happened to gold and silver?
Retail spending over this year’s 4-day Thanksgiving weekend fell 11.1%, but so many retailers start offering great deals earlier in the week. We don’t have an apples-to-apples comparison.
Oil got crushed last Thursday and then dropped a couple more bucks Friday. Many gold stocks suffered 10% drops Friday. The group has been weak for several months, and we’ve had a handful of shorts over the period. It’s nice that we get lower prices at the pump, but at some point energy, which is well-represented in all the indexes, will pull the market down. Also, margin calls within the sector may cause selling in some leadership stocks. You never know how things can unravel because you don’t know how much margin and leverage are used. Right now oil is up and well off its overnight low, which is a couple bucks lower than the current price.
Switzerland voted to not increase its central banks gold reserves. This sent gold and silver prices down a bunch, but both recovered all the losses before moving back down again. Right now the metals are down but well off their lows.
The market sold off into Friday’s close, and taken with today’s gap down open, all of last week’s gains will be gone. Was it just a little profit taking into the weekend or more meaningful? If a big fund wanted out, they should have picked more active day to do their business.
Also, the small caps started to diverge from the large caps last week.
Lots of stuff going on. Buckle up. Have a plan. Execute. And never let a small loss turn into a big loss. More after the open.
Stock headlines from barchart.com…
CSX (CSX -3.75%) was downgraded to ‘Hold’ from ‘Buy’ at TD Securities.
Exxon Mobile (XOM -4.17%) and Schlumberger (SLM +0.41%) both fell 1.3% in pre-market trading after the price of crude oil slid to a 4-1/3 year low.
Transocean (RIG -9.71%) was downgraded to ‘Neutral’ from ‘Buy’ at Guggenheim.
Diamond Offshore (DO -8.85%) and Seadrill (SDRL -8.32%) were both downgraded to ‘Neutral’ from ‘Buy’ at Guggenheim.
UBS upgraded the U.S. banking sector to ‘Overweight’ based on a positive macro outlook that should increase credit demand and benefits from a new interest rate tightening cycle.
Carnival Cruise Lines (CCL +4.84%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman Sachs.
Deere (DE -0.43%) was upgraded to ‘Outperform’ from ‘Neutral’ at RW Baird.
Navistar (NAV -0.17%) was upgraded to ‘Buy’ from ‘Neutral’ at Longbow.
Groupon (GRPN +0.27%) was upgraded to ‘Buy’ from ‘Neutral’ at BofA/Merrill Lynch.
Alcoa (AA -1.76%) was upgraded to ‘Buy’ from ‘Neutral’ at Citigroup.
Barclays keeps an ‘Overweight’ rating on Apple (AAPL -0.06%) and raises its price target on the stock to $140 from $120.
Liberty Global (LBTYA +7.44%) jumped over 10% in after-hours trading after Bloomberg reported that Vodafone is exploring a takeover of Liberty Global.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Gallup US Consumer Spending
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
11:00 Global Manufacturing PMI
Notable earnings before today’s open: IKGH
Notable earnings after today’s close: MFRM, QUNR, SCVL, THO
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers