6 Gut checks pre-open

Need to Know JULY 23, 2013 6 gut checks before the stock market's opening bell By Shawn Langlois   Flickr/umpcportal.com Good morning. Apple's results, the royal baby of this earnings season, are finally upon us, and it'll take more than a "phablet" and some Smurf-related goodwill to get this battered stock back on track after the 40% goring of the past year. Apple won't be alone, of course. We're in the midst of peak earnings season , and there's no shortage of heavyweights vying for the spotlight. As we climb further into record territory on the major exchanges, investors could begin to tap out in large numbers, like they did with Netflix, if results don't start backing up valuations. While our call of the day warns that "the final blowoff" of this bubble is imminent, historical data suggests more new highs could be on the way . The "misery index" backs up the bullish case, as well (more on that below). Cisco's taste for Sourcefire is also helping to keep tech stocks moving higher in the wee hours. Key market gauges: Asian stocks  rose after Chinese Vice Premier Zhang Gaoli vowed to keep up the government's aggressive support of economic growth . Stocks were also boosted by positive news from Japan whose Cabinet Office again upgraded its assessment of the economy. The Shanghai Composite  rose 2% while the Nikkei  rose 0.8%. Gold futures  are off slightly after a meteoric rise on the month -- up $150 since June 28. Silver  is down a bit after exploding for a 5% gain Monday. Europe stocks  are hovering around their highest since May 30, while futures on the Dow  and S&P  are also up. Earnings: Apple  is the biggie today, with its shares suffering a 20% drop since the start of 2013. The company is expected to report another drop in earnings and flat sales this afternoon. Shipments will, as always, be closely watched, as the iPhone faces stronger competition from newer smartphones. Analysts are expecting a range of 26 million to 27 million units, roughly flat with a year ago. AT&T is seen reporting a profit of 68 cents a share in the second quarter. Fellow blue chips United Technologies  and DuPont reported earlier, along with UPS , Lockheed Martin  and Freeport-McMoRan . Days after being named one of the worst companies to work for in the U.S., RadioShack  shares are up premarket on the electronics retailer's results . The buzz: Netflix  shares are spiraling toward a tough open after the company's subscriber numbers weren't up to snuff , overshadowing the fact that second-quarter earnings surged. Read about how Yahoo wins style, but Netflix wins substance when it came to their earnings calls by way of video. Dan Loeb leaving Yahoo's  board and GlaxoSmithKline's  scofflaw executives still have traction on Google's business pages, while the royal baby, of course, dominates the front page. Check out BuzzFeed's awesome roundup of the Internet's response to the heir's arrival. I told you so. Dan Loeb does indeed pump and dump Yahoo. The pump: http://t.co/jxFzfqkZAR . And the dump: http://t.co/3BRhEKq1vU — Michael Wolff (@MichaelWolffNYC) July 23, 2013 Herbalife  is a top-trending ticker after another big rally yesterday. The stock is up some 80% this year, rendering that Icahn vs. Ackman battle more than a little lopsided. Here's John Hempton's assault on Ackman's short thesis . Cisco  and Sourcefire are also trending on StockTwits, after the former said it has agreed to buy the latter for $76 a share. Sourcefire shares are poised to surge toward the buyout number when trading gets underway. Goldman Sachs's  alleged role in aluminum-price fixing is a hot topic, with this story from The Independent upvoted to the top spot on Reddit's business page . The chart of the day: The "misery index" is flashing a bull signal that will likely stick around for awhile , according to Ed Yardeni. The pink shaded areas of this chart represent bear markets of 20% or more. Typically, stocks are in rally mode when the misery reading -- which is the sum of unemployment and inflation -- is dropping. The Fed's official mandate is to lower unemployment to 6.5% and to boost inflation to 2%, and the "shadow" mandate, says Yardeni, is to boost stocks and curb bond yields. "Odds are it will remain around 8.5% through the end of next year," he wrote. "If so, then it suggests that the current bull market may last at least until then, if not longer." Ed Yardeni The call of the day: David Stockman's latest rant might not offer anything particularly new as far as how he views the state of things these days, but it's worth checking out for its sheer maniacal bearishness . "When the markets fall apart, it will be so violent and so fast that it will be very difficult for the average investor to get out of the way," he told King World News. How will it compare to the meltdowns of 2000 and 2008? "It's likely to be even more violent and more severe when the correction comes." Hence, a flight to gold can't be too far off. "This is worldwide, and therefore there will be a monetary breakdown, and at some point gold will be the one place that people will go to as they lose confidence in all currencies," Stockman said. Random reads: Pretty light blue screen, puffy white clouds and the number of times you'll see your parents  before they kick the bucket. Hey Flipper, pass me the herring . The housing recovery is in full bloom, just tally the dead koalas . The day this Spanish restaurant received "world's best" honors, its website got 12 million hits. Now you'll have to wait a year to bite into dancing ice cream. Watch the scary video of that Southwest landing . How much you need to earn to be considered successful in these 24 American cities. In L.A., anything under $350,000 doesn't cut it. "Do not talk about Fight Club," unless you're talking about Fight Club 2 . @Nick_Kostov contributed to this blog.  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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