Before the Open (Dec 19)

Good morning. Happy Friday. Happy Options Expiration Day. Happy last day before kids are home from school for a couple weeks.
The Asian/Pacific markets posted solid, across-the-board gains. Japan and Australia rallied more than 2%; Hong Kong, China, Singapore, Korea and Taiwan moved up more than 1%. Europe is currently mixed. Russia is down almost 4%, and Spain and Italy are down about 1%. France and Germany are also down. Greece is up 5.3%, followed by Stockholm (up 2.2%) and Switzerland (up 1.7%). London is up. Futures here in the States point towards an up open for the cash market.

The dollar is up. Oil and copper are up. Gold is down slightly; silver is up.
The market just completed its biggest 2-day rally of the year. The S&P surged 90 points, and the Russell is now sitting at a 5-month high.
One the way down, it only took seven days to wipe out six weeks of gains. And now it has only taken two days to almost entirely recapture those seven days of losses. Incredible movement.
The biggest risk from the last two weeks was margin calls going out due to the big losses from oil stocks. The fear was margin calls would force selling in other assets which would lead to more margin calls, etc. But with the market rallying huge, and oil stocks bouncing off their lows, the fund managers that were over-exposed to oil are at much less at risk. Because of this the cloud that hovers over the market isn’t quite as dark.
Geopolitical risks still exist because there are many countries – especially Russia – that are in very bad shape right now because of crude’s current price. I’m not sure Venezuela defaulting on debt would be a big deal (although Greece was a huge deal), but problems in Russia are problems for the world because Putin is unpredictable, can’t be trusted and absolutely hates the West (especially the US).
The move down eliminated most good long set-ups, and now the move up has wiped out most good short set-ups. In the last two months the S&P has rallied 250, dropped 100 and now rallied back about 90. My favorite group is oil. Unless crude collapses, there are some good stocks in the group that will do very well going forward. More after the open.
Stock headlines from barchart.com…
Unum Group (UNM +2.95%) was upgraded to ‘Buy’ from ‘Neutral’ at Compass Point.
CVS Health (CVS +1.43%) was upgraded to ‘Buy’ from ‘Neutral’ at SunTrust.
BlackBerry (BBRY +0.90%) fell 6% n pre-market trading after it reported Q3 EPS of 1 cent, better than consensus of a -5 cent loss, but Q3 revenue of $793 million was below consensus of $931.53 million
Walgreen (WAG +3.32%) was downgraded to ‘Neutral’ from ‘Buy’ at SunTrust.
Reuters reports that Google’s (GOOG +1.23%) next version of Android will be built directly into cars.
D. E. Shaw Kalon Portfolios reported a 5% passive stake in PBF Energy (PBF -2.90%) .
Anadarko (APC +3.07%) was initiated with a ‘Buy’ at Guggenheim with a price target of $89.
Cintas (CTAS +2.27%) reported Q2 continuing operating EPS of 86 cents, well above consensus of 78 cents, and then raised guidance on fiscal 2015 EPS ex-items to $3.20-$3.25, higher than consensus of $3.15.
Nike (NKE +2.73%) reported Q2 EPS of 74 cents, stronger than consensus of 70 cents.
Gabelli reported a 5.09% stake in Protective Life (PL -0.09%) .
Red Hat (RHT +3.40%) rose over 8% in after-hours trading after it reported Q3 EPS of 42 cents, higher than consensus of 40 cents, and then raised guidance on fiscal 2015 EPS to $1.57-$1.58, better than consensus of $1.55.
AAR Corp. (AIR +3.51%) reported Q2 EPS of 38 cents, better than consensus of 37 cents.
Pier 1 Imports (PIR -0.07%) reported Q3 EPS of 20 cents, right on consensus, although Q3 revenue $484.5 million was below consensus of $488.26 million.
iRobot (IRBT +1.71%) was initiated with an ‘Overweight’ at Piper Jaffray witha price target of $42.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
10:00 Atlanta Fed’s Business Inflation Expectations
11:00 Kansas City Fed Mfg Survey
Notable earnings before today’s open: BBRY, KMX, CCL, FINL, PAYX
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers