GDP Revisions Lower Initial Growth Estimates
The market is rallying in early trading, lessening the declines for the week. If the market closed at current levels, the S&P 500 would be down roughly -2% for the week. From its recent peak to trough, this correction has been about -3.7% so far.
Unrest in Libya is still in full force, but news that Saudi Arabia was raising oil production has calmed he oil markets a bit. Oil prices are steady right now, near $97.45. Gold prices are down a little to $1403.
In economic news, the second read on Q4 GDP indicated that the economy expanded at a 2.8% rate, which is lower than the initial estimate of 3.2%. This is a slight negative, but I think most participants are looking for strong GDP readings starting in 2011 and firming throughout the year. On the consumer front, the Univ. of Mich. sentiment survey rose to 77.5 in February, the highest reading since January 2008.
In corporate news, there was a strong batch of earnings reports in the tech sector last night, including CRM, ADSK, and AMAT.
Asian markets were higher overnight; the 10-year yield is lower to 3.43%; and the VIX is currently plunging -10% back down below 20 to 19.08.
Trading comment: This is the normal course for markets. After a sharp 3-day selloff, the market had become oversold, so a bounce was in the cards and should be expected. But it doesn't mean we are out of the woods yet. It is possible, but the odds still favor more of a pullback after some relief to the selling. My game plan was to put a little money to work during the first phase of the selloff, and then step back. If we get a second wave, I will look to do a little more. But if you look at most market corrections, the typical duration is somewhere in the range of 3-6 weeks, so we are still early in terms of how much time has elapsed.