Monday Morning Musings

I had the travel day from hell yesterday. After spending the weekend in SF, actually Stinson Beach, and enduring rain all weekend, we spent over 6 hours sitting in the airport trying to get on various standby flights only to have the eventual plane break, de-board, and start over again. Not fun.

Turning our attention to the market, I am running out of words to describe the resiliency of this market. The fact that the market has continued to stair-step higher, despite being heavily overbought, is impressive. No wonder people are comparing it to the 2003 market that turned higher in the spring of that year and never really suffered a correction. I am both glad I put some money to work last week, and mad that I didn't pull the trigger on the other buys I was looking at. Ugh.

The positive news this morning was the strong pending home sales report, which showed pending sales for March rose +3.2% for the month, better than expected. Construction spending was also stronger than expected. This news is boosting the housing index by +4.85% in early trading.

There were also some positive comments from Warren Buffett about banks like Wells Fargo (WFC) and US Bancorp (USB), saying they should come through this period just fine. His comments are boosting those stocks considerably, as well as benefiting the whole bank index.

There are still concerns about the stress tests that will be released May 7th, and which banks will have to raise how much capital, but those concerns are being trumped so far today.

Asian markets also soared overnight after Asian finance ministers said they would pool $120 billion for an emergency liquidity fund. Also, China's PMI for April was better than expected at 53.5.

The dollar is lower this morning, which is boosting commodities. Gold is back above $900, and oil is closer to $54 so far; the 10-year yield is flat at 3.17%; and the VIX is only slightly lower to 35.25. Given the strength of this rally so far, I would have expected the VIX to be down a bit more.

Trading comment: If I am feeling frustrated by the incessant advance of this market, I have to assume those feelings are rampant on the Street. The shorts are screaming, and the longs are scrambling. I am still eyeing the same positions I mentioned last week, but at this point, I might just have to admit I didn't time it as well as I would have liked and pay up a bit.

some clients own WFC, USB