Market Shakes Off Early Selloff, Awaits Obama Speech

The market opened lower again this morning, on the heels of big selloffs in Asian markets. But after the first hour of trading, the markets began to come back and are actually in positive territory as of this post.

Retailers reported same-store sales this morning (roundup coming later), and most of the reports were pretty downbeat, as expected. Wal-Mart (WMT) reported same-store sales growth of +1.7%, and lowered EPS guidance to 91-94 cents (vs. $1.06 consensus). The stock has been down as much as -8%.

Gap, Abercrombie, and Macy's also lowered their outlooks for the quarter, with Macy's saying that it would close 11 underperforming stores.

In economic news, jobless claims came in below expectations at 467,000 (vs. 545,000 consensus). This is marginally positive, but we'll see how it correlates with tomorrow's important nonfarm payrolls report. The question right now is whether unemployment peaks at 8%, 9%, or 10%.

The dollar is lower again, helping gold get a bounce. But oil is also lower, after a huge -12% plunge yesterday. This is a sign of continued weak demand. Crude prices are currently trading near $42.

Asian markets were down sharply overnight, and Europe was lower this morning also, despite the Bank of England announcing an interest rate cut of 50 bps to 1.5%.

The 10-year yield is flat at 2.48%. The VIX is up slightly to 43.5, after a big spike higher yesterday.

In a few minutes, Obama will deliver a speech outlining his economic stimulus plan and how the govt. will be able to afford such a massive effort. Let's see how the market reacts to his comments.

long WMT