Before the Open (Aug 27)

Good morning. Happy Thursday.
The Asian/Pacific markets closed up across-the-board. China rallied 5.3%, followed by Indonesia (up 4.6%), Hong Kong (up 3.6%), Singapore (up 2.6%) and India (up 2%). Japan, Australia, Malaysia, New Zealand and Taiwan rallied more than 1%. Europe is currently up across-the-board. Austria is up 3%; London, Germany, France, Netherlands, Sweden, Switzerland, Prague, Denmark, Finland, Spain, Italy, Belgium and Portugal are up more than 2%. Futures here in the States point towards a moderate gap up (by current standards) for the cash market.
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The dollar is up. Oil is up, copper is up. Gold and silver are up. Bonds are down.
The biggest rallies take place within downtrends. I’ve said this numerous times the last week. Yesterday’s rally was the biggest in four years. We could see it coming. The 50-SPX drop that took place the the last hour of the previous day wrecked of capitulation.
Overall my bias is still to the downside. I think we leg down again and take out the lows, but in the near term, as stated a couple times during the day yesterday, bias is to the upside. A healthy bounce that makes everyone feel comfortable, lures money off the sidelines, induces buying from those that sold, gets the media excited again, etc, etc – then smack it down again. It’s the ying and yang of Wall St. Scare the crap out of people on the way down, so the sell…then make them feel safe and comfortable on the way up…so they buy and hold.
Not much else to say right now. At the current time I’m not looking short. The list of stocks posted last weekend with the note “buy these high-quality stocks on dips” are doing well. More after the open.
Stock headlines from barchart.com…
Dollar General (DG +4.04%) reported Q2 EPS of 95 cents, better than consensus of 94 cents.
JM Smucker (SJM +2.15%) reported Q1 EPS of $1.32, higher than consensus of $1.24.
Tiffany & Co. (TIF +3.96%) reported Q2 EPS of 86 cents, below consensus of 91 cents.
Signet Jewelers Ltd. (SIG +3.17%) reported Q2 EPS of 78 cents, well below consensus of $1.15.
Patterson Cos. (PDCO +3.72%) reported Q1 EPS of 32 cents, weaker than consensus of 52 cents.
BofA/Merrill Lynch added AutoZone (AZO +2.66%) to the U.S. 1 List and maintained its ‘Buy’ rating and $865 price target on the stock.
Stifel upgraded Kansas City Southern (KSU +3.39%) to ‘Hold’ from ‘Sell.’
The Financial TImes reports that Abbott Labs (ABT +2.52%) is prepping a $25 billion takeover offer for St. Jude Medical (STJ +1.58%) .
Stifel upgraded CSX (CSX +4.19%) to ‘Buy’ from ‘Hold’ with a price target of $35.
Waters (WAT +5.00%) was initiated with a ‘Buy’ at Cantor with a price target of $163.
Illumina (ILMN +3.20%) was initiated with a ‘Buy’ at Cantor with a price target of $265.
Williams-Sonoma (WSM +2.53%) fell over 3% in after-hours trading after it reported Q2 EPS of 58 cents, right on consensus, but then lowered guidance on fiscal 2015 EPS to $3.35-$3.45, below consensus $3.48.
Guess (GES +7.30%) dropped over 6% in after-hours trading after it reported Q2 EPS of 21 cents, above consensus of 15 cents, but then lowered guidance on Q3 EPS to 8 cents-12 cents, below consensus of 18 cents.
Avago (AVGO +7.09%) reported Q3 EPS of $2.24, higher than consensus of $2.14.
PVH Corp. (PVH +2.03%) climbed over 3% in after-hours trading after it reported Q2 adjusted EPS of $1.37, better than consensus of $1.29.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
8:30 GDP Q2
8:30 Corporate Profits
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $29B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers