Before the Open (Dec 18)

Good morning. Happy Thursday.
The Asian/Pacific markets closed mostly up. Japan rallied more than 2%; Hong Kong, India, Indonesia and Malaysia gained more than 1%; Australia, Singapore and Taiwan also did well. Europe is currently sporting huge gains. Russia is up 6.1%, followed by Norway (up 3.4%), Spain, Greece, Switzerland, Amsterdam, France and Germany (up more than 2% each) and London, Austria, Belgium, Stockholm and Italy (up more than 1% each). Futures here in the States point towards a big gap up open for the cash market.

The dollar is up. Oil is up, copper down. Gold and silver are up.
Here we go. We got a big move up Tuesday, but that got sold into. Then we got a big move up yesterday, and the market closed near its highs. It appears the second time has been a charm. Heading into this week, as bad as things looked and felt the previous week, we had to be open minded about a year-end rally. The market can change quickly. A one-directional market one week can easily become a one-directional market in the other direction the next week. It’s hard to pinpoint exactly when it’ll happen, but there are often enough signs that hint stops should be moved to protect paper profits, and entering new positions has to be done with the attitude the trade may not last long.
The S&P dropped about 100 points in seven days, and as of today’s open, more than half those points will have been recovered. You don’t have to look back very far to remind yourself when the market bounces, it’s often of the V variety, and the rally tends to be vertical. At the October low the S&P moved 100 points in less than a week and then moved another 100 in about two weeks.
Whether this mini rally will be sold into once the end-of-year good feelings and seasonality wear away or the market surges to a new high and never looks back is not something I know right now. I don’t have a crystal ball. I do know my near term bias is up, and I’m no longer short or looking short. Things can certainly change, but for now that’s the way I’m playing it. Do I wish we had a more steady directional trend? Sure. But the ups and downs are fine too. We just can’t hold positions for as long as we’d like. More after the open.
Stock headlines from barchart.com…
Rite Aid (RAD +4.30%) reported Q3 EPS of 10 cents, double consensus of 5 cents, and then raised guidance on fiscal 2015 EPS view to 31 cents-37 cents, better than consensus of 31 cents.
Joy Global (JOY +0.20%) was upgraded to ‘Neutral’ from ‘Underperform’ at Longbow.
Starwood (HOT +1.01%) was initiated with a ‘Buy’ at Evercore ISI with a price target of $87.
Accenture PLC (ACN +2.93%) reported Q1 EPS of $1.29, higher than consensus of $1.20.
Exxon-Mobile (XOM +3.02%) climbed over 2% in pre-market trading as crude oil rose over +$1.00 a barrel.
Navistar (NAV +4.26%) gained over 2% in after-hours trading after activist investor Carl Icahn reported a 19.99% stake in the company.
AK Steel (AKS +6.11%) climbed over 5% in after-hours trading after it said it sees Q4 EPS of 5 cents-10 cents, above consensus of 4 cents.
Discover (DFS +3.31%) was initiated with a ‘Buy’ at Jefferies with a price target of $75.
Sally Beauty (SBH +2.11%) was initiated with an ‘Overweight’ at Piper Jaffray with a price target of $37.
Tupperware Brands (TUP -0.02%) was initiated with an ‘Overweight’ at Piper Jaffray with a price target of $77.
Jabil Circuit (JBL +1.93%) jumped over 4% in after-hours trading after it reported Q1 core EPS of 55 cents, higher than consensus of 48 cents, and then raised guidance on fiscal 2015 core EPS view to $1.85-$2.15, above consensus of $1.79.
Herman Miller (MLHR +3.29%) slid 6% in after-hours trading after it reported Q2 EPS ex-items of 51 cents, below consensus of 52 cents.
Oracle (ORCL +1.30%) rose over 4% in after-hours trading after it reported Q2 EPS of 69 cents, beter than consensus of 68 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
9:45 PMI Services Index Flash
10:00 Philly Fed Business Outlook
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today’s open: ACN, ATU, BRLI, CAG, NEOG, RAD, SAFM, SCHL, WGO, WOR
Notable earnings after today’s close: AIR, CTAS, NKE, PIR, RHT
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers