Before the Open (Jan 12)

Good morning. Happy Tuesday.
The Asian/Pacific markets closed with a lean to the downside. Japan dropped 2.7%; Hong Kong, Singapore and India were also weak. Indonesia rallied 1.1%. Europe is posting solid gains. Germany, France, the Netherlands, Switzerland and Poland are up more than 2%; London, Spain, Italy and many others are up more than 1%. Futures here in the States point towards a relatively big gap up open for the cash market.
—————
Report: 12 Reasons to Not Like This Market
—————
The dollar is up. Oil is up (it was down a bunch overnight); copper is down. Gold and silver are down. Bonds are down.
We entered yesterday thinking it was too late to go short, but picking a bottom would be tough because being early by even a hour or two could cause lots of pain. We ended up getting both up and down movement and very little net change.
Now today is going to start with a big gap up. It’s par for the course. The market operates so as few people as possible participate. You knew it would either be weak enough to cast a lot of doubt among bottom fishers…or gap up enough to not let the sideline money in. That’s how Wall St. operates. The market wasn’t going to open flat and bounce around long enough to let you get long. 🙂
A bounce is certainly due. As I mentioned yesterday, virtually every breadth indicator out there has moved to an extreme level. Overall I still don’t like the market, but in the near term anything goes. You know the biggest single-day rallies take place within downtrends.
The current environment is not for amateurs. Big swings, big gaps, lots of movement. If you don’t know how to play this, sit tight. More after the open.
Stock headlines from barchart.com…
Apple (AAPL +1.62%) rose nearly 2% in pre-market trading after it was upgraded to ‘Buy’ from ‘Neutral’ at Bank of America.
Wells Fargo (WFC +1.07%) was upgraded to ‘Outperform’ from ‘Market Perform’ at KBW.
Tesla Motors (TSLA -1.49%) gained over 1% in pre-market trading after CEO Elon Musk said that within 2 years he sees the possibility of self-driving cars traveling from Los Angeles to New York.
Lululemon (LULU +1.52%) climbed over 8% in pre-market trading after it raised guidance on Q4 EPS to 78 cents-80 cents from a previous forecast of 75 cents-78 cents, higher than consensus of 77 cents.
Ilumina (ILMN +0.33%) climbed over 1% in pre-market trading after it said it formed a new company called Grail, to develop a cancer-screening blood test with investments from Bill Gates and Jeff Bezos.
Fiat Chrysler Automobiles NV (FCAU +1.50%) gained 3% in after-hours trading after the company said it is sticking to plans to expand production in China this year despite market turmoil and that it expects Jeep sales to at least double in China this year from 89,000 in 2015.
Ascena Retail Group (ASNA -7.72%) reported comparable same-store-sales from Nov 21 to Jan 3 fell 4% and then lowered guidance on Q2 EPS to break-even to a loss of -3 cents, weaker than a previous estimate of a 2 cent profit and below consensus of 5 cents.
Hain Celestial (HAIN -0.44%) lowered guidance on Q2 EPS to 53 cents-56 cents, below consensus of 57 cents, and then lowered its 2016 fiscal EPS estimate to $1.95-$2.10, below consensus of $2.12.
Under Armour (UA -6.72%) rose 1% in after-hours trading after SunTrust said weakness in UA is a long-term buying opportunity as fundamentals remain intact and “significant” growth remains.
Burlington Stores (BURL +2.81%) jumped over 8% in after-hours trading after it said it sees Q4 comparable same-store-sales up 4% excluding cold weather.
Alcoa (AA -0.87%) rose nearly 2% in after-hours trading after it reported Q4 adjusted EPS of 4 cents, double expectations of 2 cents.
Apollo Education (APOL -3.19%) surged nearly 20% in after-hours trading after Dow Jones reported that people familiar with the situation said Apollo Global Management LLC could pay $1 billion for APOL.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
5:30 Stanley Fischer
6:00 NFIB Small Business Optimism Index
8:55 Redbook Chain Store Sales
10:00 Job Openings and Labor Turnover Survey
1:00 PM Results of $24B, 3-Year Note Auction
3:15 PM Fed’s Lacker: Economic Outlook
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers