Before the Open (Jul 20)

Good morning. Happy Friday.
The Asian/Pacific markets closed mixed; movement was small. China and Singapore moved up. Taiwan moved down. Europe is currently mostly up. Austria, Denmark, Finland, Italy and Sweden are up more than 1%; Netherlands, Switzerland, Prague, Germany, Spain, Portugal and France are also posting solid gains. Turkey and Russia are down more than 1%; Poland is also down. Futures here in the States point towards a small up open for the cash market.
VIDEO: Leavitt Brothers Overview
The dollar is flat. Oil is down, copper is down. Gold and silver are down. Bonds are down.
Last week was one of the market’s biggest up weeks of the year. A few indexes posted new highs; others got close. The mid caps lagged.
So far earnings season has been great for stocks. GOOGL, NFLX and others jumped to new highs after releasing their latest numbers.
Many technical indicators surged off extreme levels. Their movement confirmed the market strength.
All in all it was a great week. It was step one, but by no means is the 5-month consolidation pattern over. We need extreme bullish prints from the indicators and more new highs from the indexes…and some follow through and separation. You gotta start somewhere, so no complaints about last week…but it was only step one.
Here’s an example of an indicator that did great last week but is hardly in full-blown rally mode. The 10-day of the NYSE AD line. It surged off its lowest level of the year and then sat tight for a few days. We need two things. We need the indicator to stay above zero, and we will eventually need a high print. Last week was a good start, but we need more.

I switched my bias to “up” two weeks ago. So far, so good. I still favor the upside, but let’s not get cocky. The market can change quickly. As always, play good defense. More after the open.
Stock headlines from barchart.com…
Morgan Stanley (MS +0.73%) reported Q2 EPS of 79 cents, above consensus of 74 cents.
Halliburton (HAL -0.55%) reported Q2 EPS of 44 cents, higher than consensus of 29 cents.
Hasbro (HAS -0.22%) reported Q2 EPS of 33 cents, better than consensus of 29 cents.
Amazon.com (AMZN +1.58%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Cowen.
Brocade (BRCD -1.02%) was downgraded to ‘Sell’ from ‘Neutral’ at UBS.
Hertz (HTZ +11.89%) was reinstated with an ‘Outperform’ at Credit Suisse with a price target of $23.
SanDisk (SNDK -1.12%) was upgraded to ‘Neutral’ from ‘Reduce’ at Nomura.
Dunkin’ Brands (DNKN -0.45%) was downgraded to ‘Underperform’ from ‘Outperform’ at CLSA.
Solera (SLH -1.96%) was downgraded to ‘Neutral’ from ‘Overweight’ at Piper Jaffray.
Zillow Group (Z -0.48%) was downgraded to ‘Underweight’ from ‘Equal Weight’ at Barclays.
Huntington Ingalls (HII -0.82%) was awarded a $106.2 million government contract for engineering, technical, design, configuration management, integrated logistics support, database management, research and development, modernization, and industrial support for Navy submarines.
Viking Global Investors reported a 5.2% passive stake in Ctrip.com (CTRP unch).
American Capital reported an 8.3% passive stake in WPCS International (WPCS -1.81%).
ESL Partners reported a 9.8% stake in Seritage Growth Properties (SRG +4.06%).
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
No events scheduled.
Notable earnings before today’s open: CALM, CBU, EXAS, GPC, HAL, HAS, LII, MS, PETS, SAH
Notable earnings after today’s close: BMI, BRO, BXS, CCK, CNI, EFII, ELS, HLX, HSTM, HXL, IBM, RLI, RMBS, SANM, STLD, WERN, WWD, ZION
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers