Before the Open (Oct 13)

Good morning. Happy Thursday.
The Asian/Pacific markets closed mostly down. Indonesia and Hong Kong fell more than 1%; Australia and South Korea were also weak. Europe is currently down across-the-board. The UK, Germany, France, the Netherlands, Greece, Turkey, Denmark, Switzerland, Spain and Italy are down more than 1%. Futures in the States point towards a relatively big gap down open for the cash market.
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The dollar is down. Oil is flat; copper is down. Gold and silver are up. Bonds are up.
I’ll repeat what I wrote yesterday in the PM Obs: I’m uninspired by what I see out there. Perfectly good breakouts like SCHW – the stock traded in a 4-week pattern, touched its rising 50-day MA and then broke out on above-average volume – barely got follow through before reversing and giving back all or most of its gains. This is not what happens in strong markets. Stocks breakout; they feel good; and it feels safe to walk away from your computer because there’s a positive vibe. This isn’t the case right now. Stocks aren’t following through much, and with earnings season just now getting started, risk is definitely elevated.
The S&P took out a support level on Tuesday and then sat in a tight range yesterday on lower volume. Today’s open will be in the mid 2120’s, which is only about 5 points above the 3-month low.
I don’t think the market collapses because unless something big happens, the government isn’t going let it happen in front of the election. But bearish signals are mounting. Along with many perfectly good set ups failing, 5 of the 9 S&P Select industries are trading below their declining 50-day moving averages.
This is not a time to be aggressive. No big bets. More after the open.
Stock headlines from barchart.com…
Waste Management (WM +0.62%) was downgraded to ‘Neutral’ from ‘Outperform’ at Wedbush who cut their price target on the stock to $68 from $73.
Penske Automotive Group (PAG +0.30%) was downgraded to ‘Sell’ from ‘Hold’ at Evercore ISI.
TD Ameritrade Holding (AMTD -0.03%) was upgraded to a ‘Buy’ from ‘Neutral’ at Bank of America/Merrill Lynch who raised their price target on the stock to $43 from $33.
Charles Schwab (SCHW -0.53%) was upgraded to a ‘Buy’ from ‘Neutral’ at Bank of America/Merrill Lynch who raised their price target on the stock to $3 from $32.
Suburban Propane Partners LP (SPH +0.76%) was upgraded to ‘Buy’ from ‘Hold’ at Stifel with a 12-month target price of $36.
Five Below (FIVE -0.28%) was rated new ‘Overweight’ at Keybanc Capital Markets with a 12-month target price of $47.
MercadoLibre (MELI -0.68%) dropped 6% in after-hours trading after it commenced an underwritten public offering of up to 5.5 million shares of common stock from holder eBay.
Wells Fargo (WFC -0.29%) gained nearly 2% in after-hours trading after CEO Stumpf stepped down in the wake of the fake accounts scandal at the bank.
CSX Corp. (CSX -0.85%) rose nearly 3% in after-hours trading after it reported Q3 revenue of $2.71 billion, above consensus of $2.69 billion.
eBay (EBAY +0.13%) climbed over 2% in after-hours trading after it offered 5.5 million shares of MercadoLibre that it owns.
Dollar Tree (DLTR +0.30%) was rated a new ‘Overweight’ at Keybanc Capital Markets with a 12-month target price of $90.
Fluidigm Corp. (FLDM -3.95%) slumped over 15% in after-hours trading after it reported preliminary Q3 revenue of $22.2 million, below consensus of $29.3 million, and said it will suspend full year 2016 guidance.
Embraer SA (ERJ -1.72%) gained almost 2% in after-hours trading after Goldman Sachs upgraded the stock to ‘Buy’ from ‘Neutral on “compelling” risk/reward.
TG Therapeutucs (TGTX -7.20%) plunged over 20% in after-hours trading after setting a conference call for Thursday morning to provide an update on the GENUINE Phase 3 Trial.
Wednesday’s Key Earnings
CSX Corp. (NYSE:CSX) +2.6% AH as cost cuts boosted Q3 results.
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 Import/Export Prices
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
12:15 PM Fed’s Harker: Economic Outlook
1:00 PM Results of $12B, 30-Year Note Auction
2:00 PM Treasury Budget
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers