Before the Open (Jul 12)

Good morning. Happy Tuesday.
The Asian/Pacific markets closed up across-the-board. Japan rallied almost 3%; Hong Kong and China rallied more than 1%; Singapore, Indonesia and Taiwan also did well. Europe is currently mostly up. Switzerland and Italy are up more than 2%, and Germany, France, Austria, the Netherlands, Russia, Turkey and Spain are up more than 1%. Futures here in the States point towards a moderate gap up open for the cash market.
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The dollar is down. Oil and copper are up. Gold is down; silver is up. Bonds are down.
New all-time high yesterday for the S&P 500 (although it was already at a new high if dividends were considered). At today’s open it’ll add another 10 points.
Since I’m on record saying I fully believe the S&P will move up 2300-2400, it’s worth asking or pondering how it’ll get there. Will the market bust out and run 200 points in a month or two and completely shock almost everyone? Or will it just kind of slowly grind up and not really make any exciting headlines other than simply making a new high several times/week?
In my opinion we’re more likely to get the latter. A slow grind up – equivalent to the proverbial frog in a pot of water which is slowly warming up – that doesn’t ever pull back enough to allow the under-invested bulls to be fully invested and doesn’t scare the bears enough to cover until it’s too late is the most likely course. This type of move – one where the market just slowly moves – would piss off and frustrate traders and investors the most. It’s why I think it’s most likely. Everyone wants answers. Everyone wants fireworks. A slow grind doesn’t offer either.
Alcoa kicked off earnings season yesterday and is up 4.5% in premarket trading today. More after the open.
Stock headlines from barchart.com…
Pinnacle Foods (PF -1.83%) was upgraded to a ‘Buy’ at Goldman Sachs.
Alcoa (AA +3.26%) rallied +4% in pre-market trading after reporting Q2 adjusted EPS of 15 cents, which was better than the consensus of 9 cents. Q2 revenue of $5.30 billion was close to the market consensus.
Seagate Technology (STX +0.33%) rallied 13% in pre-market trading after its preliminary Q4 revenue beat expectations and the company announced more cost-cutting by cutting 14% of jobs.
Oracle (ORCL -0.22%) was upgraded to ‘Outperform’ from ‘Market Perform’ at BMO Capital Markets.
Astec Industries (ASTE +1.36%) was downgraded to ‘Hold’ from ‘Buy’ at BB&T Capital Markets.
Swift Transportation (SWFT +0.96%) and Marten Transport Ltd (MRTN +0.09%) were both downgraded to ‘Sector Weight’ from ‘Oveweight’ at Keyblanc Capital Markets.
Fastenal (FAST +0.29%) reported Q2 EPS of 45 cents, below consensus of 48 cents.
RR Donnelley (RRD +2.33%) rallied 5% in after-hours trading on a report by Bloomberg that Xerox (XRX -0.42%) is in early-stage talks to acquire Donnelley.
Imperva (IMPV +7.55%) fell -12% in after-hours trading after reporting disappointing adjusted EPS and revenue figures.
Tesla (TSLA +3.69%) fell -1% in after-hours trading on continued concern about the WSJ report that the SEC is considering whether Tesla failed to report a recent crash as a material event.
Monday’s Key Earnings
Alcoa (NYSE:AA) +3.8% opening Q2 earnings season with a beat.
Today’s Economic Calendar
6:00 NFIB Small Business Optimism Index
8:45 Fed’s Bullard speech
8:55 Redbook Chain Store Sales
10:00 Job Openings and Labor Turnover Survey
10:00 Wholesale Trade
1:00 PM Results of $20B, 10-Year Note Auction
10:30 PM Fed’s Mester speech
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers