Back In The Saddle

Trying to dust off the morning cobwebs after a mini vacation towards the end of last week to celebrate my b-day (it was a big one). We had a great time, but waking up with the ocean outside your balcony now seems like a distant memory already.

Back to the swing of things. The bank index was very weak late last week, with all of the confusion surrounding the mortgage mess. Citi reported solid earnings this morning, and the bank index is actually bouncing back to lead the early action.

After financials, utilities are up the second most (+0.77%), due to some M&A there. Consumer discretionary stocks are lagging (-0.35%).

The dollar is higher this morning, which is weighing on commodities. Oil prices are down a bit to $81.65, and gold prices are hovering just below $1360.

There was continued M&A action over the weekend (NU for NST, and STJ for AGAM). Asian markets were lower overnight, but Europe is higher this morning.

The 10-year yield is lower to 2.52%, after a big spike higher on Friday, right up to its overhead 50-day average. The volatility index (VIX) is 4% higher to 19.80, which is still a pretty low absolute level.

Trading comment: We are now in the thick of earnings season, which will color the days action from day to day depending on how the big stocks earnings come in. Last week, GOOG knocked the cover off the ball and surged higher, taking the sector higher along with it. Today we will hear the highly anticipated report from Apple (AAPL). And while everyone knows they should report a good number, the question will be how much of the good news is already discounted in the runup of its stock prices last week. Of course, regardless of today's reaction, I still believe AAPL is going higher in the near future.

We will also hear this week from IBM, Goldman Sachs, BofA, Wells Fargo, Amazon, and Chipolte, to name a few. So get ready. No rest for the weary.

long AAPL, BAC, GOOG