Before the Open (Mar 9)

Good morning. Happy Wednesday.
The Asian/Pacific markets closed mixed. Singapore moved up 1.1%; Australia and India also did well. China dropped 1.3%. Europe is currently mostly up. Germany, France, the Netherlands, Spain, Italy, Belgium and Portugal are up more than 1%; London, Austria, Sweden, Switzerland, Turkey and Finland are also doing well. Greece is down 2%; Russia is down 1%. Futures here in the States point towards a moderate gap up open for the cash market.
The dollar is up. Oil and copper are up. Gold and silver are down. Bonds are down.
Today is the anniversary of the bull market which started on March 9, 2009. The market still has not suffered a 20% correction, and as of now is the third-longest such stretch in history.
Gold stocks took hits yesterday. I think the run off the January low is likely over for now. I’m not saying it’s over for good and the stocks are about to revisit their lows; I’m just saying many of the stocks have experienced huge runs the last two months, and it’s time for a break. I wouldn’t be chasing here, and I wouldn’t be too anxious to buy dips either. My plan is to buy a dip…but not yet.
Many other commodity stocks took hits yesterday too. FCX, which rallied from 4 to 10, dropped 12%. CNX, which moved from 5 to 11, dropped 10%. Many others, which did equally well for about two months, took hits. The stocks need a break.
There’s an FOMC meeting next week, so interest rate talk will ramp up. If the market continues to do well, odds favor rates being raised this year – not necessarily at next week’s meeting, but at some time. This is different than in January, when it was universally agreed the Fed wouldn’t touch rates in 2016. Rate talk could influence the US dollar, which influences commodity stocks. Like I said…a good time to take a break.
Otherwise I’m going to treat the current trend like it’s up, even though the near term is not clear. We had a month of good set ups, and now it’s time to wait and see what happens. More after the open.
Stock headlines from barchart.com…
CBS Corp. (CBS -1.58%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Wells Fargo Securities.
Yelp (YELP -4.74%) and Groupon (GRPN -3.78%) were both downgraded to ‘Sell’ from ‘Neutral’ at UBS.
United Continental Holdings (UAL -2.20%) reported February traffic was up +2.7% and available seat miles were up +6%, but still sees Q1 passenger unit revenue down 6%-8% y/y due to a stronger dollar, lower surcharges, and softening domestic and international yields.
Ross Stores (ROST -0.26%) were downgraded to ‘Neutral’ from ‘Buy’ at Goldman Sachs.
Chipotle Mexican Grill (CMG -1.69%) fell nearly 4% in after-hours trading after it said it closed a store in Billerica, Massachusetts for cleaning after 4 workers at the store “were not feeling well.”
Aerovironment (AVAV -0.30%) climbed over 7% in after-hours trading after it raised guidance on yearly gross profit margin to between 38%-39.5%, up from a December forecast of 37%-37.5%.
Blue Buffalo Pet Products (BUFF -4.72%) surged over 10% in after-hours trading after it reported Q4 adjusted EPS of 16 cents, higher than consensus of 14 cents, and then raised guidance on fiscal 2016 adjusted EPS to 72 cents-74 cents, higher than consensus of 70 cents.
NCI Building Systems (NCS -3.45%) rose over 3% in after-hours trading after it reported Q1 adjusted EPS of 7 cents, well above consensus of 2 cents, as Q1 sales rose to $370 million, above consensus of $363.8 million.
Amplify Snack Brands (BETR -1.60%) jumped over 9% in after-hours trading after it reported Q4 adjusted EPS of 13 cents, higher than consensus of 9 cents and then raised guidance on 2016 adjusted EPS to 61 cents-64 cents, above consensus of 57 cents.
Zagg Inc. (ZAGG -1.42%) slumped over 10% in after-hours trading after it reported Q4 GAAP EPS of 18 cents, weaker than consensus of 24 cents.
Cerus Corp. (CERS -5.51%) slid over 5% in after-hours trading after it said it sees 2016 global revenue of $37 million-$40 million, below consensus of $44.5 million.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
7:00 MBA Mortgage Applications
10:00 Wholesale Trade
10:30 EIA Petroleum Inventories
1:00 PM Results of $20B, 10-Year Note Auction
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers