Before the Open (Dec 15)

Good morning. Happy Monday. Hope you had a great weekend.
The Asian/Pacific markets closed mostly down. Malaysia dropped 2.06%, Indonesia 1.01% and Hong Kong and Singapore nearly 1%. China moved up 0.5%. Europe is currently mixed. Greece is up 1.4%, followed by Spain (up 0.93%) and France (up 0.5%). Belgium is down 2.25%, followed by Prague (down 0.52%) and Austria (down 0.43%). Futures here in the States point towards a relatively big gap up open for the cash market.

The dollar is up. Oil is up, copper down. Gold and silver are down.
Last week was the market’s worst since the early-October plunge. Most indicators point down, but we have to keep two things in mind. 1) Seasonality is very bullish this time of year. December in general is a good month, and the last two weeks of the month as especially strong. 2) Don’t underestimate Wall St’s forgetfulness. So many times in the past it has seemed like the sky was falling one week, and the next week all was good in the world and the market moved up…and then moved up more…and then moved up more…and before you knew it, the market had rallied 12 of 15 days, and everything that caused the selling pressure was long forgotten. It happens all the time, and we know bottoms tends to be of the V variety so no warnings are needed.
My point is never get too bearish, even though the near term looks bearish.
If we get a bounce here – the S&P futures are up about 14 about an hour before the open – we’ll monitor the breadth indicators for participation. If the AD line moves up…and new highs expand…and the ATR drops…and the put/call ratio drops…and the number of stocks above certain moving averages moves up…then support will given to the strength. But if those indicators lag, a bounce probably won’t go far or last long. Resist having a strong opinion. Let the indicators guide you. More after the open.
Stock headlines from barchart.com…
Exxon Mobil (XOM -2.91%) was upgraded to ‘Market Perform’ from ‘Underperform’ at BMO Capital.
Oracle (ORCL -1.99%) was upgraded to ‘Overweight’ from ‘Equal Weight’ at Morgan Stanley.
PG&E (PCG -1.62%) was upgraded to ‘Overweight’ from ‘Neutral’ at JPMorgan Chase.
Citigroup keeps a ‘Buy’ rating on Marriot (MAR -1.11%) and raises its price target on the stock to $88 from $76.
Entergy (ETR +1.78%) was upgraded to ‘Neutral’ from ‘Sell’ at Citigroup.
Darden Restaurants (DRI -0.78%) was upgraded to ‘Market Perform’ from ‘Underperform’ at Telsey Advisory.
United Parcel Service (UPS -0.57%) was downgraded to ‘Hold’ from ‘Buy’ at Deutsche Bank.
Encore Capital (ECPG -0.99%) was upgraded to ‘Overweight’ from ‘Neutral’ at Piper Jaffray.
Cirrus Logic (CRUS -0.63%) was upgraded two notches to ‘Overweight’ from ‘Underweight’ at Barclays.
Bob Evans (BOBE +0.42%) said that CEO Steve Davis will step down.
PetSmart (PETM -0.98%) is up nearly 6% in premarket trading after a group led by BC Partners agreed to buy the company for $8.3 billion.
Point72 Asset reported a 5.1% passive stake in Jones Energy (JONE -1.90%) .
Discovery Capital reported a 8.9% passive stake in Bob Evans (BOBE +0.42%) .
Fitch downgraded France’s long-term foreign and local currency issuer default ratings to ‘AA’ from ‘AA+’ with a stable outlook.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Empire State Mfg Survey
9:15 Industrial Production
10:00 NAHB Housing Market Index
4:00 PM Treasury International Capital
Notable earnings before today’s open: none
Notable earnings after today’s close: FCEL, PAY, WG
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers