Before the Open (Jun 4)

Good morning. Happy Thursday.
The Asian/Pacific markets closed mostly down. Taiwan dropped 2.2% and Australia 1.4%. Indonesia and Malaysia were also weak. South Korea and China did well, although China was extremely volatile. Europe is currently mostly down. Greece is down 3%, and Stockholm, Norway, Amsterdam, London, Spain, Germany, Turkey, Denmark, Finland and Sweden are down more than 0.9%. Futures here in the States point towards a relatively big gap down open for the cash market.
FREE ebook -> Powerful Stock Setups (I wrote one of the chapters)
The dollar is down. Oil is down, copper is down. Gold and silver are down. Bonds are up.
Yesterday was an odd day. The price action wasn’t too bad – the SPX moved to a 3-day high and then backed off; the small caps broke out of a range and closed at its highest level in five weeks – but the internals were weak all day. The AD line never got higher than +600 and closed nearly flat. The AD volume line was subdued all day. The TICK spent time above and below 0 – not supportive of the small caps breakout.
It was a classic example of the market doing whatever it wanted in the very near term, but there’s simply no way the internals can be completely ignored for long.
At today’s open, virtually all of yesterday’s SPX gain will be gone, and about half of the RUT 1% gain will be wiped out.
Until the internals improve, the market’s upside will be limited…and sooner or later, we’ll get a correction because the bulls will stop supporting the market.
Employment numbers come out tomorrow morning. More after the open.
Stock headlines from barchart.com…
Nordstrom (JWN +0.98%) was downgraded to ‘Neutral’ from ‘Outperform’ at Credit Suisse.
Energizer (ENR -0.99%) was downgraded to ‘Equal Weight’ from ‘Overweight’ at Morgan Stanley.
Twitter (TWTR +1.65%) was downgraded to ‘Hold’ from ‘Buy’ at Evercore ISI.
Ciena (CIEN +0.99%) reported Q2 adjusted EPS of 35 cents, above consensus of 24 cents.
Diebold (DBD +2.95%) was upgraded to ‘Neutral’ from ‘Underweight’ at JPMorgan Chase.
Ericsson (ERIC unch) and AT&T (T +1.95%) were both upgraded to ‘Overweight’ from ‘Neutral’ at JPMorgan Chase.
JM Smucker (SJM -0.30%) reported Q4 EPS of $1.87, well above consensus of 99 cents.
Joy Global (JOY -0.82%) reported Q2 EPS of 59 cents, better than consensus of 56 cents.
Verizon Communications (VZ -0.12%) fell over 1% in pre-market trading after JPMorgan Chase downgraded the stock to ‘Neutral’ from ‘Overweight.’
T-Mobile (TMUS -0.80%) jumped nearly 6% and Dish Network (DISH -1.24%) climbed almost 8% in pre-market trading after the WSJ reported that T-Mobile in in merger talks with Dish Network.
Arthur J. Gallagher (AJG -0.23%) was initiated with an ‘Overweight’ at Piper Jaffray with a price target of $58.
Boeing (BA +0.39%) was awarded a $466.5 million government contract for missile guidance repair on the Minuteman III intercontinental ballistic missile.
Brown & Brown (BRO +0.89%) was initiated with an ‘Overweight’ at Piper Jaffray with a price target of $37.
Marsh & McLennan (MMC +0.64%) was initiated with an ‘Overweight’ at Piper Jaffray with a price target of $67.
Hirzel Capital reported a 7.3% stake in Hawaiian Holdings (HA -1.37%).
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
Chain Store Sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Gallup US Payroll to Population
8:30 Productivity and Costs
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today’s open: CIEN, CYBX, JOY, LE, NAV, SJM
Notable earnings after today’s close: CMTL, COO, DMND, ESL, IDT, PAY, RALY, SEAC, THO, UTIW, VNCE, ZOES, ZUMZ
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers