Before the Open (Jan 11)

Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed down across-the-board. China dropped 5.3%, Hong Kong 2.8% and Singapore, Australia, Indonesia, Malaysia, South Korea and Taiwan fell more than 1%. Europe is currently mixed. Russia is down 3.5%, and Norway, Poland and Portugal are down more than 1%. Germany, France, Turkey, Finland and Spain are doing well. Futures here in the States point towards a moderate gap up open for the cash market.
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Report: 12 Reasons to Not Like This Market
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The dollar is flat. Oil and copper are down. Gold and silver are up. Bonds are down.
Last week was one of the biggest down weeks in years…and it was one of the worst starts to a new year in history. Almost nothing was immune. Twice China caused the market to gap down huge.
Heading in we knew the underlying tone was weak…it was just a question of whether the selling would start right away or if there’d be some beginning-of-the-year buying before the next leg down began. We got our answer.
Now it’s too late to go short. Yeah there could be more downside, but the risk/reward just isn’t there any more. So many stocks have fallen so much, . Chasing short here puts you at risk of being trapped when the market reverses…and it will reverse…even if temporarily. After all, the market’s biggest up moves take place within downtrends.
Going long isn’t much easier. The stocks that held up the best last week – strong relative strength – won’t do well when the market bounces. Instead it’ll be the most beaten down stocks that get squeezed. But playing those won’t be easy. If you’re an hour or two early, you could sit in steep losses before the stocks turn around.
There are lots of day trading opportunities, but at this juncture, swing trades are very hard. Have a plan before you enter. Aim to preserve capital first, then make money. More after the open.
Stock headlines from barchart.com…
Wyndham Worldwide (WYN -0.30%) was upgraded to ‘Hold’ from ‘Sell’ at Deutsche Bank.
Ilumina (ILMN -1.52%) is up 6% in pre-market trading after it raised guidance on 2016 core adjusted EPS to $3.80-$3.90, higher than estimates of $3.76.
Whiting Petroleum (WLL +3.05%) was upgraded to ‘Outperfom’ from ‘Market Perform’ at Wells Fargo Securities.
Marathon Oil (MRO -3.00%) and Devon Energy (DVN +1.57%) were both upgraded to ‘Overweight’ from ‘Equalweight’ at Barclays.
Williams-Sonoma (WSM -3.22%) was downgraded to ‘Neutral’ from ‘Outperform’ at Wedbush.
M&T Bank (MTB -2.05%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman Sachs.
Statoil (STO -2.74%) was added to the ‘Conviction Sell’ list at Goldman Sachs.
L’oreal (LRLCY -0.45%) was added to the ‘Conviction Buy’ list at Goldman Sachs.
Keycorp (KEY -2.13%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs.
Cheniere Energy (LNG +0.11%) climbed nearly 3% in after-hours trading after Baupost raised its stake in the company to 15.01% from 9.60% in September.
HCA Holdings (HCA -0.03%) rose nearly 6% in after-hours trading after the company said its fiscal 2015 adjusted EBITDA will be about $7.9 billion, higher than consensus of $7.77 billion.
Affymetrix (AFFX -1.39%) surged over 40% in after-hours trading after Thermo Fisher Scientific TMO acquired the company for $1.3 billion or $14 a share.
Actuity Brands (AYI -3.73%) fell over 3% in after-hours trading, adding on to Friday’s -3.7% decline, after the company reported Q1 revenue of $736.6 million, below estimates of $740.1 million.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
10:00 Labor market condition index
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers