Early Look: Data Better Than Consensus Estimates

Asian markets were lower overnight, and Europe's markets saw heavy selling again. That had our futures pointing lower at the open, but the economic data that has come out has been for the most part better than expected, and that has tempered the selling in our markets.

The Nasdaq has been flirting with positive territory today, as AAPL is finally having a good day (so far). Along with tech stocks, consumer staples (XLP) are bucking the weakness so far as well.

As for the economic data, the Empire Manuf. Survey rose to 0.6 from -8.5 last month. That's a pretty big jump. Retail sales for October rose +0.5% and +0.6% ex-autos. And producer prices actually declined -0.3% in October.

Of course, all eyes remain fixed on Europe where rising bond yields and rising CDS prices point to the sustained pressure on those markets due to sovereign debt concerns. Italy's yields are back above 7.0%, and yesterday we saw CDS prices rising in France. Currently, France's benchmark bond yields 3.63%. So that's one to keep an eye on. I just saw a notable macro firm reiterating their short call on France.

The lower euro is boosting the dollar, but many commodities are higher nonetheless. Oil prices are knocking on the door of $99, while gold prices are up to $1785. Copper is also slightly higher as are silver prices.

The 10-year yield is lower today near 2.00%; and the VIX is up another +2.5% near the 32 level. So for those hoping that volatility will die down here, it doesn't look like that is in the card near-term.

Trading comment: The trading range on the S&P 500 is narrowing, which usually means some sort of breakout is coming in one direction or the other. Given that the Nasdaq has held above its 200-day average, I think the odds slightly favor a breakout in the SPX to the upside in a catch-up move with the Nazz. Predictions are hard these days with the markets being as event driven as they are. It certainly isn't a time for aggressive bets. If the SPX isn't able to hold the 1220-1225 area, I would likely become less constructive and prepare for a deeper pullback. But so far the market has been hanging in there.

long AAPL