Before the Open (Jul 6)

Good morning. Happy Wednesday.
The Asian/Pacific markets closed mostly down. Japan, Hong Kong, South Korea and Taiwan dropped more than 1%. Europe is currently mostly down. Germany, France, the Netherlands, Sweden, Denmark, Spain and Italy are down more than 2%; most other markets, including the UK, Austria, Russia, Switzerland, Belgium, Poland, Finland and Portugal are down more than 1%. Futures here in the States point towards a moderate gap down open for the cash market.
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The dollar is up slightly. Oil and copper are down. Gold and silver are up. Bonds are up.
Yesterday the market was weak early and then flat the rest of the day. Today it’ll open below yesterday’s close.
Overall I’d consider the S&P to be range bound and in consolidation mode. It’s been like this for over three months. Rallies have gotten sold; dips have gotten bought. There have been a lot of overlapping candles, and no move has lasted longer than two weeks. The bulls and bears have taken turns being in control, but no one has been in control for long. Here’s the daily S&P.

Beneath the surface, some breadth indicators are doing well. Others, such as the percentage of SPX stocks above their 50-day moving averages, tell us the participation rate is not very good. The market has little chance of moving up if they don’t improve.

Gold and silver continue to do well. I’m still long – have been for a while. Oil is pulling back – it’s has to hold $46. Otherwise I don’t see many good set-ups. It’s concerning the best-performing groups are gold, silver, utilities and REITs. More after the open.
Stock headlines from barchart.com…
Netflix (NFLX +1.28%) fell over 2% in pre-market trading after it was downgraded to ‘Underperform’ from ‘Hold’ at Jeffries on subscriber growth concerns,
Royal Gold (RGLD +0.44%) was upgraded to ‘Buy’ from ‘Neutral’ at Dundee with a 12-month price target of $85.
Teledyne Technologies (TDY -1.64%) was downgraded to ‘Neutral’ from ‘Buy’ at CL King with a 12-month target price of $107.
Dow Chemical (DOW -1.57%) was downgraded to ‘Underperform’ from ‘Outperform’ at CLSA.
U.S. Steel (X -3.45%) was upgraded to ‘Hold’ from ‘Sell’ at Deutsche Bank.
Harley Davidson (HOG -10.84%) was downgraded to ‘Neutral’ from ‘Buy’ at UBS.
Newmont Mining (NEM +0.10%) and Coeur Mining (CDE +1.24%) both are up over 2% in pre-market trading as the price of gold climbed to a 2-1/3 year high.
Biogen (BIIB -1.24%) rose over 1% in after-hours trading on positive carryover from Tuesday’s decision by the European Commission to approve Biogen and Abbvie’s Zinbryta for treating relapsing forms of multiple sclerosis.
Ventas (VTR +0.83%) said it will acquire a group of medical and life-science properties from Blackstone Group LP for $1.5 billion.
Comcast (CMCSA -0.41%) dropped over 1% in after-hours trading on negative carryover from Tuesday’s session when the company said it will incorporate Netflix’s web-streaming services from Comcast cable boxes.
Tesla (TSLA -1.16%) slid over 1% in after-hours trading after the Detroit Free Press reported a Tesla Model X was in Autopilot mode when it crashed and rolled over on the Pennsylvania Turnpike on July 1.
Medivation (MDVN +2.73%) gained over 1% in after-hours trading after Reuters reported that it is in talks with Sanofi and other companies after it recently rejected a raised bid from Sanofi.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 International Trade
8:30 Gallup U.S. Job Creation Index
8:55 Redbook Chain Store Sales
9:00 Daniel Tarullo speech
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers