7 Gut checks pre-open

Need to Know JULY 18, 2013 7 gut checks before the stock market's opening bell By Shawn Langlois   Flickr/engineroomblog Good morning. It's been a "hot July". Not just here in London , where the Tube's hellish inferno is fermenting the funk of four million Brits, but also in the U.S. stock market. At this point, the blue chips are halfway toward one of their best Julys on record, according to the Stock Trader's Almanac . Sounds great. But the reality is that when July brings Dow gains of at least 3.5%, which happens about a third of the time, there's usually some pain to follow. The last time was in 2010, when July brought a 7.1% rally. A month later, stocks were almost 5% lower. And let's not forget about the post-summer carnage of 1987. With the meat of what Bernanke is serving up to Congress already digested, it's time to turn our attention back to earnings. Tech earnings, specifically. The sector has fared OK this year, but it's still an underperformer, and early indications from IBM and Intel suggest lowly expectations entering this earnings season were warranted. For techs to take a leadership position, it'll have to start with Google and Microsoft today. Key market gauges: The Nikkei  had no problem with what Bernanke had to say, rising 1.3% to buck selling elsewhere in Asia . The Shanghai Composite , for instance, dropped more than 1%. Aside from Germany's DAX , Europe  is moving higher, while futures on the Dow  and the S&P  aren't doing much. The economy: Bernanke isn't done yet. He'll take the mic before the Senate in his second day of Congressional testimony. That's not it, though. There's a trio of indicators due for release, including a fresh read on layoffs, the Philly Fed manufacturing survey, and the Conference Board's leading indicators. Earnings: Google  headlines another thick lineup of earnings, with improved ad pricing and its growing dominance in search paving the way for what analysts believe will be solid revenue and profit gains. Microsoft  is also reporting, along with Chipotle , Morgan Stanley , Verizon , Intuitive Surgical  and BlackRock , to name a few. Read: Stocks to watch . It could be a tough day, earnings-wise, if Nokia's retreat is any indication. The stock is down almost 5% in premarket trading after the Finnish smartphone maker's second-quarter results gave the sellers a leg up early. Then again, Morgan Stanley  is firing higher after its upbeat report . The buzz: Tesla's  wild ride continues as the stock surged 10.3% Wednesday, cashing in on a price-target hike to claw back a chunk of the prior session's drop. Shares are up early. Read about Elon Musk's "wild new idea." Atop the StockTwits trending list, Tesla is joined by China's Baidu , which popped up on the radar this week when it announced the acquisition of 91 Wireless Websoft for $1.9 billion. Sentiment toward the stock has spiked toward bullish this month, closely following the big price rally. One contributor who goes by the name "Thundersforever" posted this chart, which points to a lofty $147 target. Carl Icahn brought Dell  back into the spotlight when he blasted the board and said he has a CEO candidate in mind for the company. The stock sat out a mild rally in techs yesterday and is weakening a bit this morning. Some other stocks you might want to keep an eye on in light of the Delivering Alpha conference include Herbalife , Caterpillar , Hewlett-Packard , Toyota  and any one of these 10 picks from Leon Cooperman. The chart of the day: To those homeowners sitting on fat appreciation, this might seem like a load of bollocks. But the numbers, taking the 50,000-foot view, don't lie. Neither does this chart, which illustrates the home-ownership myth that's been propagated by realtors for decades. "We should stop thinking about housing or talking about it like it's an amazing 'investment','" writes Cullen Roche of Pragmatic Capitalism. "Whether you rent or buy, you are experiencing an expense. The real costs of that expense will depend on your specific situation." Read more on why the real returns are "unlikely to be anything to write home about." The call of the day: While investors divided their time between Bernanke and the lineup at Delivering Alpha, Pimco boss Bill Gross, who has had a rough go of it lately, was clearly focused on the former. After the Fed chairman told Congress of the fuzzy timeline for tapering, Gross responded quickly with this free bit of tweet advice : Gross: Focus on the policy rate…Focus on the policy rate…Focus on the policy rate. Buy 5-7 year #Treasuries . — PIMCO (@PIMCO) July 17, 2013 Mebane Faber offered up some data supporting the thesis that bonds are bottoming here. He said that 10-year bonds, for instance, don't decline much more than 8%, and "if they hit mid teens, that is a great buying opportunity." For 30-year bonds, he pointed out that a 15% drawdown is rare, with 25% even more so. Mebane Faber Random reads: Mibblio, Kaggle, Shodogg and the disturbing trend of goofy startup names . Blame it on the lack of available dot-com addresses. JT dissed, Salmond protests and why Muirfield doesn't want to be seen "letting women join the club at the point of a bayonet. " My money's on @IanJamesPoulter . Film nerds, prepare to be incensed. Here's what Netflix is doing to your movies. A map of of the U.S., rock-star wise . A royal switcheroo to a location "hard by the seat of the Middleton family manse"? Survey says ... China will unseat the U.S. as world's leading superpower . 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. MarketWatch, the MarketWatch logo, and BigCharts are registered trademarks of MarketWatch, Inc. By using this site, you agree to the Terms of Service and Privacy Policy (updated 6/26/07). MarketWatch - Attn: Customer Service, 201 California St., San Francisco, CA 94111