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Minyanville's T3 Morning Market Call: Could Fed Minutes Rain on Market Parade?


Select companies reported earnings last night, and this morning that could be in play for traders.

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US stock futures are near the flat line Wednesday morning after the S&P (INDEXSP:.INX) extended to new 52-week highs again yesterday. Traders will be watching the latest Fed minutes today, which will be released at 2:00 p.m. ET, for clues about the pace of purchase by the Fed in 2013. Some believe that with the S&P only a stone's throw away from all-time highs, the FOMC may start to reign in its QE asset purchasing program, but with employment data still lagging and inflation under control, it's hard to believe the Fed will take its foot off the gas.

While the meat of earnings season has passed, there are still select names that reported last night, and this morning that could be in play for traders. Dell (NASDAQ:DELL), which has been the focus of a well-publicized take-private offer, is up slightly pre-market after topping estimates. The stock may not stray too far from the potential purchase price. Herbalife (NYSE:HLF) could continue its recent roller coaster after reporting earnings. The company has been the subject of a tug-of-war between high-profile investors. Bill Ackman of Pershing Square Capital believes the company is a pyramid scheme and ultimately destined for zero, while famed investor Carl Icahn believes the company is very healthy and headed for the mother of all short squeezes. Watch to see how earnings and the conference call affect the stock today.

Yesterday we saw some faulty signs in a leading sector, the homebuilders (NYSEARCA:XHB), although the group was able to pare losses into the close. Weak housing data weighed on the group, and weak earnings this morning from major component Toll Brothers (NYSE:TOL) this morning could add further pressure. TOL is down more than 3% this morning, so let's see how the gap is handled. We like to look for leading indicators to forecast a potential market correction, and if one of the leading sectors really starts to break down it could be a red flag.

Office Depot (NYSE:ODP) looks set to finalize its stock-for-stock merger with OfficeMax (NYSE:OMX), pending shareholder and regulatory approval, and both stocks are cheering the news. OMX finished yesterday up more than 20% after the news hit, and ODP surged nearly 10%. Even Target (NYSE:TGT) posted healthy gains due to consolidation of competition in the sector. M&A activity is a sign of a healthy market.

Gold (NYSE:GLD) is down again this morning after breaking down out of its wedge pattern last week. Perhaps the commodity is anticipating more hawkish commentary from the Fed when minutes are released today. Keep an eye on this commodity ETF today as it often shows volatility surrounding these Fed-related announcements.

Apple (NASDAQ:AAPL) is down nearly 1% this morning after reports of a hiring slowdown at its Foxconn manufacturing plant. It's unclear whether the slowdown has to do with weakening iPhone 5 demand, but investors have grown anxious about AAPL's stock since the recent precipitous sell-off. The former marker leader showed weakness in the morning yesterday but was able to get back to the flat line by the close. With sentiment becoming more bearish by the day, it may take a major product announcement or new dividend to re-ignite the stock.

Google (NASDAQ:GOOG) stretched out to new all-time highs yesterday amid reports that the company was contemplating opening retail stores, à la Apple. If feels difficult to initiate new longs at these levels, but after some rest near highs GOOG rewarded traders who are willing to buy high and sell higher. Although AAPL has weighed on the Nasdaq (INDEXNASDAQ:NDX), it's healthy to see a stock like GOOG trading at all-time highs.

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Scott Redler is long AMZN, SSYS, AAPL, BAC, MSFT, FB, TBT, S, GE, CELG, MGM calls. Short SPY.
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