Before the Open (Jul 25)

Good morning. Happy Monday. Hope you had a great weekend.
The Asian/Pacific markets closed with a lean to the upside. India and New Zealand rallied more than 1%; Australia, Indonesia and Malaysia also did well. Singapore was weak. Europe is currently mostly up. Turkey is up more than 2%; Sweden and Poland more than 1%; Germany, France, Belgium and Finland are also doing well. Greece is down about 1%. Futures in the States point towards a flat 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 is down, copper is up. Gold and silver are down. Bonds are down.
I don’t have anything to add to the comments made in the weekly report posted over the weekend. In it I said I continue to like the market overall and believe the S&P remains on track to hit 2300-2400, but in the near term (next couple weeks) support for continued upside is waning. A few negative divergences are forming between the market and the internals.
The FOMC meets this week. There is virtually no expectation rates are raised, so this meeting should be a non-event.
The DNC takes place this week. Since Clinton is the favorite right now to win in November it’s possible news from the 4-day event moves the market. For example if they said something about Glass-Steagall, financials are likely to see some volatility.
Verizon (VZ) is buying Yahoo’s (YHOO) core internet assets for just under $5B. At its peak, YHOO was worth about $200B. In my opinion it has been a complete and utter failure. Yeah it still exits, but it failed miserably to capitalize on opportunities the last 15 years. Most of what will be left of Yahoo will be their investment in BABA.
Last week was slow. The market needs to rest or correct. I don’t think this is a time to aggressively put money to work. More after the open.
Stock headlines from barchart.com…
Verizon (VZ +1.32%) this morning announced a detal to buy Yahoo’s (YHOO +1.36%) core assets for about $4.83 billion in cash. Yahoo this morning is up about +0.4% in pre-market trading this morning.
Nintendo (7974 Japan) in Japan today fell sharply by the daily limit of -18% after Nintendo’s U.S.-listed shares (NTDOY -10.55%) dropped -11% on Friday as the company said late Friday its financial impact will be limited from the worldwide hit-app Pokeman Go and that the company would not need to revise its guidance higher due to the hit. The company has an effective economic stake of just 13% in the app, according to some estimates. Nintendo reports earnings later this week.
Tesla (TSLA +0.80%) and SolarCity (SCTY +0.19%) said they are close to a final acquisition agreement.
TerraForm Power (TERP -0.40%) announced that the company adopted a poison pill shareholder rights plan to prevent Class A shares after lat Friday’s regulatory filing disclosing that Brookfield Asset Management and Appaloosa plan to jointly bid for SunEdison’s stake in TERP.
Credit Suisse raised its target price on American Airlines (AAL +4.00%) to $34 from $29 due to the recent higher valutions in the airline sector.
Capital One Financial (COF -1.41%) was downgraded to ‘Hold’ from ‘Buy’ at Rafferty Capital Markets with a 12-month target price of $78.
VeriFone Systems (PAY -0.42%) gained almost 1% in after-hours trading after former CEO Doug Bergeron said he would consider a takeover bid for VeriFone at the right price.
Terraform Power (TERP -0.40%) rose over 3% in after-hours trading after news that Brookfield met with Appaloosa on Jul 18 to discuss purchasing SUNE Terra Form shares.
Core Laboratories NV (CLB +0.41%) fell over 1% in after-hours trading after the company said it was contacted by the U.S. Department of Justice “several months ago” over Unaoil.
Today’s Economic Calendar
10:30 Dallas Fed Manufacturing Survey
1:00 PM Results of $26B, 2-Year Note Auction

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