7 gut checks pre open

Need to Know MAY 21, 2013 7 gut checks before the stock market's opening bell By Shawn Langlois   Shutterstock Good morning. Much of this stubborn rally has been marked by the relatively stellar performance of defensive stocks, the kind that don't typically lead markets higher, but instead serve as a foothold during drearier times. The kind your grandpa might frame and hang in his office. Now, however, some of the typical cyclical leaders, from technology to finance, have reared up and are supporting the next leg. Essentially, the hare just took the lead from the tortoise . Drilling down a bit further, another trend has emerged -- scooping up those unloved junk stocks that have yet to partake in all the fun. Yes, the most debt-burdened U.S. companies are beating the rest of the stock market by a wider margin than they have in almost four years, according to Bloomberg. That's because the low-interest rate environment and growing economy, which Goldman cites in its bullish forecast below, are paving the way for those with the lowest working capital, the weakest earnings and the biggest piles of debt to cut borrowing costs and avoid default . As it stands now, the market's insane 18-straight-Tuesday's winning streak is in jeopardy with stocks mostly hovering around in flat territory. We'll see if a fairly full slate of earnings and some Fed speeches can help make it 19. Key market gauges: Gold  got back in the win column Monday after eight-straight sessions in the red, but it's back to its losing ways this morning. Same with silver . Read: Firmer dollar weighs on gold prices . Bespoke Some gold bulls are banking on an imminent rebound out of this "double-bottom formation," according to Bespoke Investment Group. As for the global markets, there's just not a whole lot to get excited about at this point. Asia  barely budged, while Europe  is edging lower, except for the FTSE 100 , which is pushing into territory it hasn't seen in more than a year. And after yesterday's ho-hum retreat, futures on the Dow  and the S&P  are still in a bit of a slumber . The economy: St. Louis Fed President James Bullard and New York Fed President William Dudley will serve as warm-up acts today for Fed Chair Ben Bernanke's closely-watched testimony to Congress tomorrow. Bullard is in Frankfurt talking about monetary policy, while Dudley will also touch on Japan when he takes the stage at the Japan Society in New York. Read: Spotlight on the economy . Earnings: Home Depot's upbeat report highlights action from the retail sector, with Dick's Sporting Goods , Best Buy  and AutoZone  also posting quarterly numbers. From the tech sector, Intuit and Analog Devices hand in results. Read: Stocks to watch . Home Depot is one of the big winners early. Its stock is up 4% after the company reported an 18% surge in first-quarter profit thanks to what CEO Frank Blake called a recovering housing market. Best Buy, not so much. Shares are down more than 2% after the electronics retailer said it swung to a loss . The buzz: Microsoft  is trending this morning ahead of the expected launch of its new Xbox . Activision Blizzard , one of the videogame stocks that has rallied in anticipation of the launch, is also grabbing clicks. J.P. Morgan  is holding a pivotal shareholder meeting today, and the final votes will be tallied on a resolution to split Jamie Dimon's duties as chairman and chief executive. Read why this powwow could be an inflection point for shareholders and just how much say they get in the boardroom. Remember, Dimon watchers: White smoke means JPMorgan has a new chairman, black smoke means Dimon keeps the job. $JPM — Mark Gongloff (@markgongloff) May 21, 2013 Yahoo's  Tumblr acquisition is still drawing mixed reviews. Howard Linzon says the real loser is the middle class , which died in 2008. Bernanke isn't the only big name testifying to Congress this week. Apple boss  Tim Cook makes his debut today when he presses lawmakers to simplify corporate taxes while defending his own company's practices. Senator John McCain called Apple "one of the largest tax avoiders." Read: Political watch . The chart of the day: If earnings are the mother's milk of the stock market, then, by the looks of this chart from @Not_Jim_Cramer , the milk might be getting pretty chunky. Zero Hedge, pointing to what the blog dubs the "WTF chart of the day," suspects there should be a "new normal mantra" for the "million marching lemmings" and that's "central bank liquidity is the PCP of the stock market." @Not_Jim_Cramer The call of the day: The S&P 500  is headed toward 1,750 this year, 1,900 next year, and on up to 2,100 by 2015, according to the latest price-target note from Goldman Sachs . Why? The healing economy, rising dividends, and the prospect for low, sustained interest rates. What's more, if interest rates stay low despite better growth, then we could see an even steeper climb, they added. This morning, Goldman's Sheila Patel, touted as the replacement for Jim O'Neill, echoed the firm's broader upbeat equity assessment by saying that a "gradual" rotation out of fixed income investments is still underway. "People are moving money," she told CNBC . "I do think you see money come back to equities." Random reads: "Scrape me up before you go slow." Hey, don't laugh. The Sun goes into detail about George Michael bouncing down the M1 . Printed pizza and "the audacious plan to end hunger with 3D-printed food."  Also, check out five technologies, including 3D printing, that you might be scared of, but probably shouldn't be . Except Google  Glass. A roundup on that horrific tornado . "It dropped quite simply, quite innocently from his lips, but it changed our collective destinies," Ray Manzarek once wrote about Jim Morrison and the forming of The Doors back in 1965. RIP Ray . Here he is, doing his thing . This is how Tumblr pays tribute . Need to Know starts early and is updated as needed until the opening bell, but sign up here  to get it delivered once to your e-mail box. Be sure to check the Need to Know item. The e-mailed version will be sent out at approximately 8:45 a.m. Eastern. Follow @slangwise  on Twitter. Get the latest news on our mobile site: http://www.marketwatch.com/m MarketWatch has sent you this newsletter because you signed up to receive it. To ensure you receive this newsletter in the future, please add marketwatchmail.com to your list of approved senders. Sent to: alanrussell@princetoncap.com Unsubscribe | Subscribe Copyright 2013 MarketWatch, Inc. All rights reserved. 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