Amid All The Talk of Slowing Growth, the IMF Raises GDP Projections

The market is higher in early trading, adding on to yesterday's outsized rally. Asian markets followed the lead of the U.S. and rallied strongly overnight, led by Japan (+2.8%). This morning, European markets are also higher, after the Bank of England and the ECB both left interest rates unchanged at 0.50% and 1.00%, respectively.

But the biggest news that I have seen are the headlines from the IMF that it has increased its world GDP projections for 2010 from 4.2% to 4.6%. Haven't they heard all the chatter about the coming slowdown? I guess not. For 2011, it held its forecast steady at 4.2%, although it did lower its forecast for the Euro area in particular.

I personally think that their forecasts will prove overly optimistic, as they likely have strong growth projections for China than I think will materialize. But it is nonetheless interesting that they are taking their estimates higher rather than lower.

In economic news, jobless claims came in a bit lower than expectations, but continuing claims fell all the way to 4.41 million, which is the lowest continuing claims count in 20 months. This positive labor data likely helped boost bullish sentiment at the open.

The euro is higher this morning, while the dollar is lower. Oil prices are higher to $75.50, but gold prices are down again, near $1190 currently.

The 10-year yield is bouncing back above the 3% level to 3.03%; and the VIX is down slightly to 26.80.

Trading comment: I didn't make many trades yesterday, other than adding to a Ford preferred we own. If the market closes up again today, I might look to lighten up on some of the ETFs we own. The market could continue higher as it works off its oversold condition, but we will soon be into earnings season, where further progress will depend on what managements have to say about their outlooks for profits.

long FprA, VXX