Before the Open (Jul 5)

Good morning. Happy Tuesday. Hope you had a great, long weekend.
Yesterday the Asian/Pacific markets closed mostly up. China rallied 1.9%; Hong Kong did better than 1.3%; Singapore, Australia and Japan also did well. Today, the Asian/Pacific markets mostly fell. Hong Kong dropped 1.5%; Japan, Australia and Taiwan were also weak.
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LB Weekly – the indexes, the breadth indicators, a look at the big picture
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Yesterday Europe was weak. Italy fell 1.7%, followed by Poland, Austria and Sweden (down 1%) and France, Germany, Greece, the Netherlands, London, Belgium and Finland (down 0.7 – 0.9%). Today Europe is posting even bigger losses. Austria, Germany, France, Finland and Spain are down 2% or more; Belgium, the Netherlands, Norway, Russia, Greece, Denmark, Switzerland and Portugal are down 1% or more.
Futures in the States point towards a relatively big gap down open for the cash market. But this, of course, comes off a week when the S&P posted its biggest weekly gain in many months.
The dollar is flat. Oil is down big; copper is down. Gold and silver both rallied hard yesterday but are now up small amounts relative to their Friday closes. Bonds are up.
The US market has some catching up to do. The foreign markets have trade two full days without the US being open for business.
I don’t have much to add to the comments made in the weekly report posted over the weekend. In it I simply said last week’s quick recovery was impressive, and overall I consider the market to be consolidating within an uptrend. The market doesn’t have to break out any time soon (it can remain range bound for many months), but absent negative news from Europe, I’d say the odds of moving up to new highs is greater than moving down to multi-month lows.
The market has done a great job absorbing a lot of negative news lately, so from a “reaction of the news” vantage point, Wall St. is doing very well. I know there’s a long list of reasons to not believe last week’s rally and to expect lower prices going forward, but you have to respect the price action. It was very good at a time the market could have fallen apart.
In my eyes the overall trend is up…but we’re still in consolidation mode. More after the open.
Stock headlines from barchart.com…
Tesla (TSLA +1.99%) dropped over 4% in pre-market trading after the company delivered 14,370 automobiles in Q2, below expectations of 17,000.
Illumina (ILMN +0.25%) was downgraded to ‘Underweight’ from ‘Equalweight’ at Morgan Stanley.
CenterPoint Energy (CNP +0.21%) was downgraded to ‘Hold’ from ‘Buy’ at Tudor Pickering & Co.
Nordstrom (JWN +0.47%) was upgraded to ‘Hold’ from ‘Sell’ at Miller Tabak & Co.
Netflix (NFLX +5.67%) was downgraded to ‘Hold’ from ‘Buy at Needham.
Cerner Corp. (CERN +0.53%) was downgraded to ‘Market Perform’ from ‘Outperform’ at Raymond James.
CyberArk Software Ltd. (CYBR -0.45%) was upgraded to ‘Overweight’ from ‘Equal-weight’ at Barclays with a target price of $60.
Esperion Therapeutics (ESPR +4.76%) was downgraded to ‘Hold’ from ‘Buy’ at Wallachbeth Capital with a 12-month price target of $35.
According to people familiar with the matter, Aetna (AET -1.78%) is preparing to sell assets worth several billion dollars as it seeks to silence regulatory concerns over its proposed $37 billion takeover of Humana.
Eiger BioPharmaceuticals (EIGR +0.45%) was rated a new ‘Outperform’ at Oppenheimer with an 18-month target price of $34.
Thursday’s Key Earnings
ConAgra Foods (NYSE:CAG) +0.4% following in-line earnings.
Micron (NASDAQ:MU) -8.9% AH on another sales decline.
Today’s Economic Calendar
8:30 Gallup US ECI
10:00 Factory Orders
12:30 PM TD Ameritrade IMX
1:00 PM Gallup US Consumer Spending Measure

Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers