Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly up. China, Australia, Indonesia and South Korea posted moderate gains. Europe currently leans to the downside. Greece is down 2.2%; Spain, France, Italy and Stockholm are posting moderate losses. Russia is up 1.2%. Futures here in the States point towards a flat open for the cash market.
The dollar is down. Oil is down, copper is down. Gold and silver are up. Bonds are mixed.
Last week ended with a whimper. February was one of the biggest up months in years, and with all the indexes hitting new highs, there’s no question the trend is up (this is what the major groups and their top components did last week). But warnings started surfacing last week.
The NYSE AD line and AD volume line are lagging and diverging, and the percentage of SPX stocks above their 20-day MAs or at a 20-day high are either declining or heading south. The market’s breadth is deteriorating. This doesn’t have to lead to a pullback right now, but it’ll happen in the next week or so unless these indicators and others don’t quickly right themselves.
But there’s no reason to believe a correction will be anything but a typical correction within a solid uptrend. Dips should be bought until that proves to be unwise. And besides, tops take time to form, so even if a top was in its beginning stages, time for lots of up and down movement would be needed before the market headed south.
So in the near term I’m neutral and somewhat anticipating a pullback…long term my bias remains to the upside. More after the open.
Stock headlines from barchart.com…
MasterCard (MA -1.24%) jumped nearly 10% in pre-market trading after it joined with Samsung Electronics to introduce mobile payments on phones.
Cardinal Health (CAH -0.20%) will buy Cordis from Johnson & Johnson (JNJ -0.28%) in a $1.99 billion deal.
Warrem Buffett said he sold his entire Exxon Mobil (XOM -0.12%) stake in Q4.
International Business Machines (IBM +0.67%) was downgraded to ‘Underweight’ from ‘Neutral’ at Atlantic Equities.
BlackRock (BLK -0.96%) was downgraded to ‘Neutral’ from ‘Buy’ at Citigroup.
Lumber Liquidators (LL +5.34%) was downgraded to ‘Equal Weight’ from ‘Overweight’ at Morgan Stanley.
United Rentals (URI -1.27%) was upgraded to ‘Overweight’ from ‘Equal Weight’ at Morgan Stanley.
Northern Oil and Gas (NOG +5.64%) was downgraded to ‘Neutral’ from ‘Buy’ at SunTrust.
Crane (CR -2.21%) was downgraded to ‘Underperform’ from ‘Neutral’ at BofA/Merrill Lynch.
Endo International PLC (ENDP +0.42%) reported Q4 EPS of 54 cents, less than half the consensus of $1.12.
Lockheed Martin (LMT -0.64%) and United Technologies (UTX -0.62%) were awarded a joint venture $2 billion government contract for 1,710 weapon replaceable assemblies and replaceable assemblies’ components in support of the H-60 aircraft.
Barron’s reports that Icahn Enterprises (IEP -1.85%) appears pricey at almost $100 per unit as the company’s indicative net asset value at year-end 2014 was approximately $69 per unit.
Dresser-Rand (DRC -0.10%) reported Q4 adjusted EPS of $1.52, higher than consensus of $1.30, and then announced a planned reduction in its workforce of approximately 8%.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Gallup US Consumer Spending Measure
8:30 Personal Income and Outlays
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
Notable earnings before today’s open: AMBC, ANFI, BID, ECYT, EMES, ENDP, EVEP, FSS, GTI, ICPT, JKS, LXU, MHR, NCT, OMG, PMC, SSE, SSYS, STNG, VGR
Notable earnings after today’s close: ARNA, BALT, CHUY, CIM, CKEC, CMLS, CODI, CZR, DTSI, EPIQ, GWRE, HALO, HTGC, INN, MBI, MCEP, MDR, MTDR, MYL, NBR, NTRI, OTC:OPWR, PANW, PRAA, SLXP, SN, STKL, XON
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers