Stocks Rebounding From Yesterday's Selloff
Stocks are off to a strong start this morning, despite a worse than expected report on the US trade deficit. The weaker trade deficit will likely mean downward revisions to the third quarter GDP calculations.
Speaking of GDP, news this morning that the Eurozone has officially emerged from recession after five straight quarters of contraction. GDP for the 16-country zone expanded +0.4% during the third quarter, which is pretty paltry growth, but it is positive nonetheless.
Asian markets closed mixed, after representatives from China indicated that the country's currency wound not gain against the dollar in the short -term, despite comments earlier in the week to the contrary.
The dollar index is lower today, continuing the relationship between stocks and the dollar. Interestingly, commodities are mostly lower today also, with oil falling down near $75.60 and gold trading roughly flat at $1107.
The 10-year yield is up a touch to 3.45%; and the VIX is down -2.9% to 23.54.
Trading comment: As soon as the market sold off yesterday, I heard more people calling for a market top. I don't think yesterday's action was anything more than churning under resistance at S&P 1100, after a streak of several up days in the market. I still expect us to consolidate around here for a bit, and then break above the 1100 level on stronger volume. The Nasdaq is in a similarly bullish setup.