Quick Look: Stocks Steady In Early Trading
The market is slightly higher so far this morning, after a couple of positive economic revisions.
Productivity for Q1 was revised higher to 1.8% (from 1.6%) and unit labor costs were revised lower to 0.7% (from 0.9%). With unit labor costs this low, and continued significant excess capacity in most parts of the economy, it's hard to see a big pickup in inflation right around the corner.
Asian markets got whacked overnight, following the large selloff yesterday in U.S. markets. The dollar is lower today, but that isn't helping commodities much. Oil prices are down slightly, struggling to hold the $100 level, while gold prices are giving back yesterday's gains, trading near $1537.
The 10-year yield is trying to get back to 3.0%; and the VIX is lower to 17.98.
Trading comment: Yesterday's negative action pretty much negated any positive indications from the previous day. The S&P 500 is back below its 50-day moving average, which means we are in a more defensive posture for the time being. Bearish sentiment has started to build, but I suspect its going to take more frustrating selloffs to bring out more bearishness, such that sentiment gets back to the point that the market can bottom and launch on another more sustainable rally. For now, I expect choppy action to continue. On a positive note, its nice to see AAPL holding above its 50-day average.