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Need to Know
JUNE 24, 2013
5 gut checks before the stock
market's opening bell
By Shawn Langlois
Good
morning.
Here we go again. Just when Friday brought to an end the string of
triple-digit swings on the Dow and instilled some much-needed calm over the
global markets, U.S. investors are waking up to a meltdown in China.
If the PBOC's reluctance to intervene wasn't
enough, Goldman Sachs goosed the sellers by cutting the
country's economic growth forecasts through 2014 due to "soft cyclical
signals and recent tightening of financial conditions."
This drop is the latest, and perhaps clearest, chapter in the
emerging-market exodus that, according to the Sober Look blog , has
seen investors "dumping emerging-markets equities and bonds with the
intensity not seen since the financial crisis."
Key market gauges: The bottom fell out of the
Shanghai Composite , as the benchmark gauge suffered its biggest retreat in
almost four years amid mounting fears of a liquidity crunch . The
carnage spread throughout the rest of Asia as the Hang Seng and
the Nikkei were also hit hard. Read: China's alarming credit crunch .
Europe is faring just a bit better, with most major indexes in the
region down about 1%. Futures on the Dow and the S&P are
pointing to a big drop after a move north to end a tough run last week.
Silver is under pressure this morning after UBS cuts its outlook for this year and next,
saying the metal could follow gold lower as the Fed reigns in stimulus.
The buzz: Facebook , riding the unveil of its video service
as well as an analyst upgrade, bucked weakness in the broader market last
week. But the company also admitted Friday that a glitch in its system
spilled some contact info on some six million users, and the stock is down
1% premarket.
More
troubling headlines about the Dreamliner have thrust Boeing back into
the spotlight. This latest glitch has to do with a brake indicator issue that caused United
to make an emergency landing. This follows an oil filter problem last week
and a glitch in its anti-icing system before that, both of which led to
unscheduled landings.
Apple is the top-trending ticker on StockTwits after Jefferies cut the stock's price target to $405 from
$420, citing weaker iPhone estimates and margin pressure. Shares are off
more than 1%. BlackBerry , GM and Lululemon join Apple on the
list.
Unlike Apple, Google drew some analyst praise ahead of the open, with
J.P. Morgan raising its price target
to $1,025 from $860, citing search pricing and continued strength for
YouTube. In this nasty environment, it's not helping the stock much in
premarket trading. Shares are off almost 1%.
JP Morgan raises price target on Google to $1,025. Becomes at least 10th
company with a price target above $1,000. $GOOG
— Bespoke (@bespokeinvest) June 24, 2013
The chart of the day:Gold isn't getting much love to
start the week. Goldman cut its targets, Citi says sub $1,100 is "not
an impossibility," and Carl Swenlin on Decision Point paints an even
drearier picture. He says that while "an important bottom may arrive
at any time," the "congestion" on the left side of this
chart suggests $1,000 makes the most sense. "Gold is in a bear market,
so we don't expect bullish outcomes," Swenlin wrote. "Bottom-pick
at your own risk."
The
call of the day: Peter Brandt of Factor Trading
is looking for crude to drop to $65 a barrel, a 30% plunge from where
it's at now. He came to this target using a series of charts that "could be an
accident waiting to happen." For those doubting a move of this
magnitude, Brandt says you can "take your pet macro
economic/fundamental scenario and burn it with the trash." This chart
shows what he calls "a tremendous amount of compression that will at
some point be released."
Random
reads: The Brits have a long way to go
if they want to catch Berlin (big
"if"), but this Bitcoin pub and its booze-peddling sisters
are a good start.
Stripes (the Dark Tiger) was supposed to be worth $1,000 by now, but he can
be yours for $9.95. What happened to the can't-miss investments in Beanie
Babies?
I was just about to sign up, but maybe I won't do that Ironman after all.
Getting spiritual with atheists in the Bible Belt.
Twinkies are back! It's almost like they never
left.
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