Before the Open (Jan 27)

Good morning. Happy Wednesday. Happy Fed Day.
The Asian/Pacific markets closed mostly up. Japan rallied 2.7%; Indonesia, South Korea and Hong Kong did better than 1%. Australia dropped 1.1%. Europe is mixed, and there isn’t a lot of overall movement. Russia is up more than 2%, Belgium more than 1% and Hungary and Czech Republic are also doing well. Austria, Norway, Sweden and Italy are down more than 1%; Finland is also weak. Futures here in the States point towards a moderate gap down open for the cash market.
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The dollar is down. Oil is down, copper is up. Gold and silver are down. Bonds are down.
The Fed’s 2-day meeting culminates today with a statement on the economy, rates and their expectations going forward. Nobody expects them to raise rates – even if the market hadn’t fallen the last couple weeks – but with the 2016 losses, Wall St. now wants to be reassured that if things get worse, the Fed is ready, willing and able to do something. I’m not sure why Wall St. has this attitude. Over history, we have a recession about ever 5 years. Things suck for a year or so, but then they get better and it’s back to business as usual. As of now it’s been 7 years since the last recession, but Wall St. seems to think we should never have a recession again, that as soon as the economy weakens, the Fed should do something to prevent it. It is what it is, and from a trading standpoint, the market is likely to sell off if the Fed isn’t extremely dovish. That means they better not talk tough. They must fully recognize the state of things in the US and overseas, otherwise Wall St. will think “they don’t have a clue.” The Fed has become a big ass-kisser the last few years, so I’m sure Wall St. will get what it wants.
Once the Fed is done, all attention will turn to earnings season. Apple is down premarket. They forecast their first revenue drop in 13 years. Tim Cook said: “We’re seeing extreme conditions unlike anything we have ever experienced before.” AAPL has struggled since last summer. Wall St wants the next big thing from the company. The iWatch isn’t it. TV doesn’t seem to be it. There are problems with their self-driving car development.
That’s it for now. The Fed is front and center.
Stock headlines from barchart.com…
Apple (AAPL +0.55%) dropped over 3% in pre-market trading after it reported shipments of 74.8 million iPhone units in Q1, short of projections of 75.5 million, and forecast Q2 revenue of $50 billion-$53 billion, below consensus of $55.5 billion.
AT&T (T +1.14%) slid nearly 2% in after-hours trading after it reported Q4 adjusted EPS of 63 cents, right on expectations, although Q4 revenue of $42.1 billion was below expectations of $42.7 billion, and new monthly subscribers rose 526,000, less than estimates of 555,000.
Stryker (SYK +1.71%) was upgraded to ‘Buy’ from ‘Hold’ at Brean Capital with a 12-month price target of $115.
Anthem (ANTM -0.66%) reported Q4 EPS of $1.14, below consensus of $1.18.
CA Technologies (CA +2.29%) climbed over 4% in after-hours trading after it reported Q3 adjusted EPS of 63 cents, higher than consensus of 58 cents.
U.S. Steel (X +12.28%) dropped over 9% in after-hours trading after it said it sees 2016 Ebitda near break-even, weaker than consensus of +$353.5 million.
Hawaiian Holdings (HA +2.31%) gained 5% in after-hours trading after it reported Q4 adjusted EPS of 85 cents, better than consensus of 84 cents, and said it sees Q1 capacity up 2.5% to 4.5%.
Ethan Allen (ETH +2.66%) climbed nearly 5% in after-hours trading after it reported Q2 adjusted EPS of 55 cents, better than consensus of 44 cents.
Capital One Financial (COF +2.93%) rose 1% in after-hours trading after it reported Q4 adjusted EPS of $1.67, higher than consensus of $1.61.
Raptor Pharmaceutical (RPTP +3.66%) surged over 15% in after-hours trading after Citigroup upgraded it to ‘Buy’ from ‘Neutral.’
Total System Services (TSS +1.70%) slid over 4% in after-hours trading after it reported Q4 adjusted EPS continuing operations of 57 cents, below consensus of 60 cents.
Lannett (LCI +1.22%) tumbled over 10% in after-hours trading after it forecast Q2 adjusted EPS of 93 cents-95 cents, below consensus of 98 cents, and then lowered adjusted gross margins of fiscal 2016 sales to 61%-63% of net sales, below an earlier forecat of 71%-73%.
Fate Therapeutics (FATE +0.81%) soared 17% in after-hours trading after it announced FDA clearance of Investigational New Drug Application for its ProTmune for prevention of acute GvHD and CMV infection.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
7:00 MBA Mortgage Applications
10:00 New Home Sales
10:30 EIA Petroleum Inventories
11:30 Results of $15B, 2-Year FRN Auction
1:00 PM Results of $35B, 5-Year Note Auction
2:00 PM FOMC Announcement
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers