Oil Not Rising Despite Geopolitical Tensions
The market was lower in early trading under mild selling pressure, but since then things have started to firm up and the declines are fading.
Commodities are rallying as there is some weakness in the dollar. Cotton is hitting more new highs, and gold prices have rallied back to $1380. But oil really can't get moving, and is lower near $85.15. This comes despite the news that Iran is sending war ships to the Suez. Normally, this would cause a big spike in oil prices. So the lack of strength in oil could be portending more weakness once the geopolitical scene eases.
In economic news, the Philly Fed survey surged to 35.9 (vs. 21.0 consensus), which marks the best reading in several years. It is surprising how many indicators we have seen lately hit levels that mark multi-year highs. Corporate earnings should surpass their all-times this year, which makes it more likely that the equity markets should reach new highs in the near future as well.
In corporate news, we got more earnings reports. Strong reactions can be seen in stocks such as WMB, TBL, and NVDA. While negative reactions are hitting NTAP and LIZ.
Asian markets were higher overnight, after strong GDP reports in Taiwan and Singapore. The 10-year yield is lower to 3.56%. And the VIX is up 1% near 17.0.
Trading comment: Semi stocks are especially strong. Look at VSEA, CYMI, LRCX to name a few. And the semi etf (SMH) continues to make new highs also. Energy stocks are strong so far today, while financials are lagging. Tech is solid as well, except for AAPL which is not participating today.