U.S. GDP Rises to 3.2%, But Disappoints Some

The market is lower in early trading, on a wave of crosscurrents. There was another big round of earnings announcements last night, and most of the stocks that I follow are down on those announcements. Some of the ones giving me angst today include SNDK, F, AMZN, and MSFT.

We got a preliminary look at Q4 GDP this morning, which came in at +3.2%. That is an improvement in growth from the previous quarter's 2.6% rate, but it is below what many were looking for with a number in the 3.7% range. But this number will be subject to a couple more revisions, so it could get revised higher going forward.

The turmoil that is going on in Egypt the last couple of days is causing a bit of a flight to safety. To wit, global equities are lower while the dollar, Treasuries, oil, and gold are all higher. Oil is up to $87.15, while gold is getting a small bounce to $1327.

Asian markets were lower overnight following the news that S&P lower the debt rating for Japan. The 10-year yield is lower to 3.35%; and the volatility index (VIX) is seeing a really big spike so far, up 11% right now to the 18.0 level (right where its overhead 50-day average sits).

Trading comment: The market is very choppy right now, but we will have to see if the usual buying shows up this afternoon to mitigate the current declines. Right now, the S&P 500 is at 1287, which is down 1% on the day but would still leave it up for the week. Could this be the start of a correction? Too soon to say for sure, but anything is possible. That said, I am looking to add to some big-cap industrials that are pulling back from recent breakouts.

long F, SNDK, VIX calls