Before the Open (Feb 8)

Good morning. Happy Monday. Hope you had a good weekend.
Many of the Asian/Pacific markets were closed today. Japan gained 1.1%; India dropped 1.3%. Europe is posting big, across-the-board losses. Greece is down more than 6%, Denmark more than 4%, Austria, the Netherlands, Norway, Sweden and Spain are down more than 3%, and London, Germany, France, Belgium, the Czech Republic, Finland and Italy are down more than 2%. Futures in the States point towards a big gap down open for the cash market.
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The dollar is up. Oil and copper are down. Gold and silver are up. Bonds are up.
The market is not in good shape right now. It hasn’t been in good shape for a while, and things seem to be getting worse. Last year I pointed out many things I didn’t like about the market, and then in early-January I summarized everything in a series of blog posts. Nothing has changed since then. All the things that bothered me still bother me. Breadth is still weak; the small caps are still lagging; margin debt is still high. There are only two items that are less of an issue: rates and the US dollar. Rates aren’t going anywhere the rest of the year. And the dollar got hit hard last week and doesn’t seem ready to breakout at 100. Phew! But tech stocks are now lagging, so the lack of leadership is even worse.
Facebook is close to falling beneath 100. Amazon has dropped from 700 to 500. Netflix has dropped from 130 to 80. Google has dropped from 800 to 700. Apple continues to trend down. Microsoft is below 50 again. The list is long. Starbucks, Nike, Costco – all heading south. Last year’s winners are selling off hard, and the best-performing groups over the last month are gold and utilities. But this isn’t going to cut it. Besides the negative, safe-haven status of those groups, they aren’t big enough to absorb much demand. The 20 biggest utility companies combined equal Apple in market cap.
My overall bias remains to the downside. There will be bounces, but don’t get lured in for long term positions. Rallies are to be sold…it’s going to be like this for a while.
Stock headlines from barchart.com…
CBOE Holdings (CBOE -1.62%) was downgraded to ‘Underpeform’ from ‘Outperform’ at CLSA.
Loews (L -0.71%) reported Q4 adjusted EPS of 46 cents, well below consensus of 61 cents.
Hasbro (HAS -2.37%) reported Q4 EPS of $1.39, better than consensus of $1.29.
L Brands (LB -3.96%) was upgraded to ‘Buy’ from ‘Hold’ at Brean Capital.
Cognizant Technology Solutions (CTSH -1.81%) reported Q4 EPS of 80 cents, higher than consensus of 78 cents.
Athenehealth (ATHN -12.84%) was upgraded to ‘Buy’ from ‘Hold’ at Topeka Capital Markets with a 12-month price target of $160.
Newell Rubbermaid (NWL -2.91%) was rated a new ‘Buy’ at Gabelli & Co.
St. Jude Medical (STJ -3.47%) was upgraded to ‘Hold’ from ‘Sell’ at Canaccord Genuity.
Cisco Systems (CSCO -2.76%) was upgraded to ‘Neutral’ from ‘Underperform’ at Macquarie.
Kellogg (K +0.01%) was downgraded to ‘Hold’ from ‘Buy’ at Edward Jones.
Sprouts Farmers Market (SFM -2.59%) jumped 6% in after-hours trading after it said it will replace Solarwinds in the S&P Midcap 400 as of the close of trading on Monday, Feb 8.
GoPro (GPRO +1.84%) climbed nearly 5% in after-hours trading after it signed a collaborative patent licensing agreement with Microsoft for file storage and other system technologies.
NVIDIA Corp. (NVDA -6.31%) rose almost 1% in after-hours trading after a federal jury in Richmond, VA said that Nvidia doesn’t infringe on Samsung’s memory-chip patent.
Apollo Education Group (APOL -1.97%) fell 5% in after-hours trading after the company received a second subpoena from the California Attorney General on documents and information related to matters including marketing, recruiting, compensation of enrollment advisers, complaints and financial aid.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
10:00 Labor market condition index
12:30 PM TD Ameritrade IMX
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers