Stocks Higher After Global Markets Bounce

The market is higher again in early trading. Yesterday's rally was solid, and really picked up steam into the close. Overnight, Asian markets rallied, led by Japan's 3.2% surge. And this morning, Europe's markets were higher which helped sentiment in the U.S. at the open.

In economic news, the ISM Services index for May was in-line at 55.4. Final Q1 productivity came in a little light at 2.8% (vs. 3.3% consensus) and unit labor costs fell -1.3%. Retailers also reported same-store sales figures this morning, which were somewhat mixed but most retail stocks are higher.

There is a lot of anticipation over tomorrow's jobs report. Consensus is near 500,000 jobs added, which is a big number. But we need to see how many of these were related to Census hiring vs. private payrolls. Today's ADP report came in a little light, although it hasn't been the best indicator for the big monthly payroll report.

It's not a great sign that the euro can't bounce. This is boosting the dollar in turn. Oil is higher near $73.25, while gold is lower to $1215.

The 10-year yield is higher to 3.88%; and the volatility index (VIX) is down to 29.67, after a big plunge yesterday that took the fear gauge below the 30 level.

Trading comment: The S&P 500 continues to struggle getting back above its 200-day average. You can see this in the chart below. I think the longer it stays below this key moving average, the more likely it is that we are going to see another move lower. This is one of the reasons I have not put much cash to work, and have stayed defensive.