Market Pulls Back After Big Rally On Monday
The market is under light selling pressure in early trading, despite some positive earnings reports from retailers.
Macy's (M) and Target (TGT) both reported better than expected earnings, and their stocks are getting a boost. Seperately, consumer confidence fell to 75.0 (vs. 82.0 consensus) as the negativity bubble continues.
PPI inflation data came in higher than expected, but the market reaction is fairly muted, probably since the CPI data that came out last week already prepared investors for this. If the market were worried, bond yields would likely be higher today. But the 10-year yield is down today to 3.85%.
Asian markets were almost all higher overnight, except for Japan. Oil is flat hovering near $99. And investor sentiment indicators are running high witht the CBOE put/call over 1.0, and the ARMS Index over 1.50.
I think that the high put/call and ARMS data could put a floor under stocks, and help the market rally today. My guess is many are still underinvested, and if the market turns higher, managers will be looking to put more money to work on the long side.