Good morning. Happy Wednesday.
The Asian/Pacific markets closed mixed. China, Hong Kong and India dropped more than 1%. Japan gained 3.2%, South Korea 2.6% and Malaysia 1.1%. Europe is currently mostly down, but movement is nowhere near what it’s been. Norway is up. Germany, France, Austria, Belgium, Netherlands, Denmark, Switzerland, Spain, Italy and Portugal are down. Futures here in the States point towards a big gap up open for the cash market…although nowhere near as big as yesterday’s 75-point SPX gap up.
Sign up for our email list and get reports and videos sent directly to you.
The dollar is up a small amount. Oil is up, copper down. Gold and silver down. Bonds are up.
We got some capitulation yesterday into the close. The S&P dropped 60 the last hour…the Dow 500. Shesh. The S&P traded in a 75-point range for six months…then it had a couple 60-75 point days…now a 60-point hour. Volume has been huge, and many indicators have fallen to extreme levels. I’d say some bulls have been shaken out. If the market wanted to bounce – actually bounce for a couple days – now would be a good time.
My overall bias remains to the downside, but I’m always aware huge vertical moves take place within downtrends. So even though I expect lower prices – not just a lower low, but another leg down – there will be tradeable pops to the long side.
Play the extremes. Rallies can be sold, and dips can be bought (although you can’t go all in at once, and you have to have a short leash on trades). Try to stay out of the middle. This is the wild wild west. Big, huge, nasty moves in both directions. Rule number one is don’t lose money. The opportunity to make money is huge, but the opportunity to lose is just as big. If you’re a pro, go for it. If you didn’t trade through the financial crisis, I wouoldn’t entirely sit out because the best way to learn is to get in the game, but do it with small position size. More after the open.
Stock headlines from barchart.com…
Amazon.com (AMZN +0.65%) was upgraded to ‘Buy’ from ‘Hold’ at Evercore ISI.
Best Buy (BBY +12.57%) was upgraded to ‘Strong Buy’ from ‘Market Perform’ at Raymond James.
Express (EXPR +1.14%) reported Q2 EPS of 25 cents, higher than consensus of 16 cents.
BHP Billiton (BHP +2.30%) was upgraded to ‘Sector Perform’ from ‘Underperform’ at RBC Capital.
Healthcare Trust (HTA -3.40%) and Healthcare Realty Trust (HR -2.56%) were both upgraded to ‘Buy’ from ‘Hold’ at Stifel.
Cooper Companies (COO -0.33%) were upgraded to ‘Overweight’ from ‘Sector Weight’ at KeyBanc.
Schlumberger (SLB -1.83%) agreed to acquire Cameron (CAM -0.96%) in deal valued at $14.8 billion.
Google (GOOG -1.28%) rose over 3% in pre-market trading after Goldman Sachs upgraded the stock to ‘Conviction Buy’ from ‘Neutral.’
Transocean (RIG -0.49%) fell over 5% in pre-market trading after it announced that the company will convene an extraordinary general meeting of shareholders on October 29 to discuss the possible cancellation of the Q3 and Q4 installments of its annual dividend.
Oshkosh Defense (OSK +1.53%) jumped over 10% in after-hours trading after it said it was awarded a $6.7 billion contract with the U.S. Army to manufacture 17,000 Joint Light Tactical Vehicles.
Jack Henry (JKHY -0.11%) reported Q4 EPS of 75 cents, higher than consensus of 67 cents.
Dycom (DY +1.57%) reported Q4 non-GAAP EPS of 97 cents, well above consensus of 83 cents.
NextEra Energy Partners (NEP -7.28%) was initiated with an ‘Outperform’ at Baird with a price target of $43.
Solera (SLH +1.09%) reported Q4 adjusted EPS of 81 cents, better than consensus of 80 cents.
CBRE Group (CBG -2.77%) was initiated with a ‘Buy’ at Sterne Agee CRT wit a price target of $42.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 Durable Goods
10:30 EIA Petroleum Inventories
11:30 Results of $13B, 2-Year FRN Auction
1:00 PM Results of $35B, 5-Year Note Auction
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers