Before the Open (Dec 12)

Good morning. Happy Friday.
The Asian/Pacific markets closed mixed. China and Japan led to the upside; Indonesia and Malaysia dropped the most. Europe is currently mostly down. Austria is down 2.1%; Italy, Spain, Germany, France, London, Belgium, Amsterdam and Switzerland are down more than 1%. Futures here in the States point towards a moderate gap down open for the cash market.

The dollar is down. Oil and copper are down. Gold is down, silver is up.
It’s been a heck of a week. Coming in our bias was to the downside, and so far we’ve gotten the biggest down week since the October bottom. And for the S&P 500, it’ll be the first down week over the same time period. The breadth indicators still have work to do before bottoming, so I’m not in a hurry here. If you’re not comfortable going short, that’s fine. You can make a pretty good living going long only, but you have to have patience during periods like this.
Oil remains a big drag. Crude fell below $60 yesterday and is now trading in the low 59’s. Oil stocks have gotten hit. Shipping companies have gotten hit. Banks which lend to oil companies are taking hits. And now the railroads, which were big winners for much of 2014, are cracking. Airlines and delivery companies have been winners.
I’m taking the market a couple days at a time. For now my bias remains to the downside. I’d like to see a total washout of the breadth indicators to signal capitulation before getting interested in going long again. More after the open.
Stock headlines from barchart.com…
Morgan Stanley (MS +0.03%) was downgraded to ‘Neutral’ from ‘Buy’ at Buckingham.
Costco (COST +0.83%) was downgraded to ‘Neutral’ from ‘Buy’ at Janney Capital.
Sherwin-Williams (SHW +3.00%) lowered guidance on fiscal 2014 EPS to $8.75-$8.80, below consensus of $8.81, and also lowered guidance on fiscal 2015 EPS to $10.65-$10.85, below consensus of $10.87.
Mindray Medical (MR -0.28%) was downgraded to ‘Underweight’ from ‘Equal Weight’ at Morgan Stanley.
Avery Dennison (AVY +0.80%) was upgraded to ‘Buy’ from ‘Hold’ at Topeka.
Goodrich Petroleum (GDP +14.21%) was downgraded to ‘Underweight’ from ‘Overweight’ at JPMorgan Chase.
Lazard (LAZ -0.95%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Keefe Bruyette.
CI Investments reported a 5.16% passive stake in Forest City (FCE.A -0.24%).
United Technologies (UTX +0.48%) lowered guidance on fiscal 2014 EPS to approximately $6.80, below consensus of $6.87, and also lowered guidance on fiscal 2015 EPS to $7.00-$7.20, less than consensus of $7.27.
Nordson (NDSN +1.58%) reported Q4 EPS of $1.15, higher than consensus of $1.13.
Quiksilver (ZQK -2.63%) reported a Q4 EPS loss of -29 cents, a much bigger loss than consensus of -11 cents.
Esterline (ESL +0.38%) reported Q4 adjusted EPS of $1.82, less than consensus of $1.85.
Adobe (ADBE -0.16%) jumped over 7% in after-hours trading after it reported Q4 adjusted EPS of 36 cents, higher than consensus of 30 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Producer Price Index
9:55 Reuters/UofM Consumer Sentiment
Notable earnings before today’s open: none
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers