Before the Open (Apr 18)

Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly down. Japan dropped 3.4%, and China fell 1.4%. Hong Kong and Malaysia were also weak. India and Indonesia did well. Europe is currently mostly down, but losses aren’t very big. Belgium, Russia and Portugal are down more than 1%; Norway and Spain are also weak. Turkey is doing well. Futures here in the States point towards a moderate gap down open for the cash market.
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LB Weekly – the indexes, the breadth indicators, a look at the big picture
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The dollar is down a small amount. Oil and copper are down. Gold is up, silver is down. Bonds are up.
The big news over the weekend was the failure of OPEC and non-OPEC members to agree to freeze oil production at the January levels. Iran didn’t even bother showing up at the gathering in Doha, which really pissed off Saudi Arabia.
With production levels already super high and storage capacity already tapped out, oil dropped as much as $2.75 overnight, but is not only down $1.75.
The news gives us a great benchmark to observe the movement of oil from. This is worst possible news (although not surprising), so if oil is able to brush it off and not fall too much over the next couple trading days, it’ll lend even more evidence a bottom is in place and the intermediate term uptrend is in tact. Firming and moving up would be a very positive sign.
But if a lot of damage is suffered the next couple days, it doesn’t mean the oil uptrend is over, but it will mean we’ll need to sit back, let the charts reset and then re-evaluate at a later date.
Huge, market-moving news items are good because they give us a benchmark to gauge future movement by.
I personally would not be surprised if oil didn’t suffer much. If if countries agree to limit production, many of them would have violated the agreement…and Wall St. knows that. An agreement would have been in spirit only and would not have been adhered to or enforced.
Let’s see what happens. More after the open.
Stock headlines from barchart.com…
ConocoPhillips (COP -1.18%) and Chevron (CVX -0.77%) are both down over 2% in pre-market trading as crude oil fell to a 1-week low after oil output talks between OPEC and non-OPEC members ended without a deal on freezing crude production.
Union Pacific (UNP -1.35%) was downgraded to ‘Neutral’ from ‘Buy’ at UBS>
Edison International (EIX +1.46%) and Exelon (EXC -1.63%) were both downgraded to ‘Hold’ from ‘Buy’ at Deutsche Bank.
Broadcom Ltd. (AVGO -2.10%) was rated a new ‘Outperform’ at Cowen with a price target of $190.
Apple (AAPL -2.01%) and Verizon Communications (VZ -0.02%) were both upgraded to ‘Buy’ from ‘Hold’ at Erste Group.
NetApp (NTAP -2.03%) was downgraded to ‘Underperform’ from ‘Neutral’ at Sterne Agee CRT.
Disney (DIS -0.04%) was upgraded to ‘Buy’ from ‘Hold’ at Pivotal Research Group LLC with a 12-month price target of $121.
Chemical Financial (CHFC +0.46%) reported Q1 adjusted EPS of 65 cents, higher than consensus of 63 cents.
Autoliv (ALV -0.57%) was downgraded to ‘Sell’ from ‘Neutral’ at Goldman Sachs.
Groupon (GRPN +3.85%) gained over 1% in after-hours trading after New Enterprise Associates reported a 7.7% stake in the company.
Autohome (ATHM +6.60%) fell over 1% in after-hours trading after it received a non-binding proposal from a consortium for $31.50/ADS, below Friday’s closing price of $32.15.
Calumet Specialty Products (CLMT -7.39%) dropped nearly 3% in after-hours trading after it said it sees a Q1 net loss of $59 million-$83 million.
Zoe’s Kitchen (ZOES +2.21%) rose over 1% in after-hours trading after the company dismissed PricewaterhouseCoopers LLP and appointed Deloitte & Touche LLP as its accountant.
Today’s Economic Calendar
8:30 Fed’s Williams speech
10:00 NAHB Housing Market Index
7:00 PM Fed’s Rosengren speech
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers