Monday Morning Musings: Stocks Rally On G-20 Meeting, and Dollar Weakness
The market is up nicely this morning on the heels of the G-20 meeting over the weekend, where representatives reiterated their opinion that global stimulus needs to be maintained. If you looked at the futures last night, as I do, you would have seen that the markets were already reflecting this strength well before our markets opened this morning.
The dollar is also making fresh lows this morning, and as we have noted, stocks and commodities have been rallying in tandem lately on days when the dollar is moving lower. That is certainly true today, with gold spiking to new highs, oil rising back to $79, and other commodities strong as well.
The 10-year yield is lower to 3.49%; and the VIX is -2.8% lower, back below its 50-day average to 23.51. This weeks looks relatively light in terms of major earnings announcements or economic releases.
Trading comment: I had a piece up over the weekend that looked at sentiment indicators and noted how much bearishness had risen recently. I'm not sure what happened to it, so I'll have to go and repost it in a bit.
The Dow is making new highs for the year this morning, while the S&P and Nasdaq are back above their 50-day moving averages. This puts the market in good position to work its way higher, and with sentiment having grown so bearish recently, I believe that will support the market here as well. I think we are back in dip buying mode.