Before the Open (Jun 22)

Good morning. Happy Wednesday.
The Asian/Pacific markets closed mixed. Hong Kong, China and South Korea closed up; Japan and New Zealand closed down. Europe is currently mostly up. Germany and the Czech Republic are up more than 1%; London, France, Austria, the Netherlands, Norway, Poland and Spain are also doing well. Futures here in the States point towards a positive open for the cash market.
—————
List of Indexes and ETFs – here
—————
The dollar is down. Oil and copper are up. Gold and silver are down small amounts. Bonds are down.
Today is day #2 of Janet Yellen testifying on Capital Hill. Yesterday she squashed any thoughts of raising rates in July, citing considerable uncertainty with the economy and the potential for Great Britain to leave the EU.
The Brexit vote is tomorrow. I think it starts early morning, which means by the time we wake up here in the States, voters will have already been at the polls for several hours. I don’t know if they have the same exit polling we have in the US, and I don’t know if the media will attempt to predict winners like they do here either.
It would be foolish to have big risk on right now. If you plan on trading for the next 20 years, there’s no harm scaling back for a couple days until the results from events like this get priced in.
Speaking of risk, many brokerages have increased their margins (some have doubled their margins), so some traders will need to scale back the next two days and then re-established their full positions next week.
No big bets right now. More after the open.
Stock headlines from barchart.com…
Adobe Systems (ADBE +1.77%) dropped over 5% in pre-market trading after it reported Q2 adjusted EPS of 71 cents, higher than consensus of 68 cents, but said it expects Q3 revenue of $1.42 billion-$1.47 billion, below consensus of $1.47 billion.
Fortune Brands Home & Security (FBHS -0.12%) gained over 1% in after-hours trading after it was announced that it will replace Cablevision Systems in the S&P 500 after the close of trading on June 23.
SolarCity (SCTY -3.15%) surged over 23% in after-hours trading after Tesla offered to buy the company for $2.86 billion. Other solar stocks also rallied on the news with SunPower (SPWR -1.06%) and Vivint Solar (VSLR -1.80%) up over 3% and First Solar (FSLR -0.83%) up 2%.
Tesla (TSLA -0.04%) fell over 8% in after-hours trading after it offered to buy SolarCity for $2.86 billion.
American Railcar Industries (ARII -0.88%) was rated a new ‘MArket Perform’ at Cowen with a 12-month price target of $40.
McDonald’s (MCD -0.64%) was downgraded to ‘Neutral’ from ‘Buy’ at Nomura.
HP Inc (HPQ +1.99%) shed gains and fell over 3% in after-hours trading after it said it will reinvest $285 million from previously announced marketing optimization asset divestiture back into its printing business. The stock has climbed 3% in after-hours trading after it said it sees Q3 adjusted EPS continuing operations of 43 cents-46 cents, higher than consensus of 39 cents.
KB Home (KBH +0.35%) climbed over 2% in after-hours trading after it reported Q2 adjusted EPS of 24 cents, better than consensus of 18 cents and said Q2 net orders were up +8% y/y, higher than consensus of +2.2% y/y.
Intercontinental Hotels Group Plc (IHG +0.59%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman Sachs.
Universal American (UAM +0.85%) tumbled 4% in after-hours trading after it proposed a $100 million offering of convertible senior notes due in 2021.
Cott Corp. (COT -0.38%) fell 3% in after-hours trading after it priced a 13.1 million share common stock offering at $15,25.
QEP Resources (QEP +1.85%) slid nearly 3% in after-hours trading after it offered 20 million shares of common stock to fund its purchase of oil and gas properties in the Permian Basis for $600 million.
Tuesday’s Key Earnings
Adobe (NASDAQ:ADBE) -5.2% AH as guidance fell short.
CarMax (NYSE:KMX) -4.9% following sluggish sales, earnings.
FedEx (NYSE:FDX) -1.2% AH on pension adjustments and expenses.
Lennar (NYSE:LEN) -1.2% despite topping estimates.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
9:00 FHFA House Price Index
10:00 Existing Home Sales
10:00 Yellen delivers semi-annual monetary policy testimony
10:30 EIA Petroleum Inventories
11:30 Results of $13B, 2-Year FRN Auction
1:00 PM Results of $34B, 7-Year Note Auction
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers