Investors Like Trend In Jobless Claims
The market is higher again in early trading with the S&P 500 getting closer to its all-time highs. I would expect another round of media hype touting the stock market once this happens. The S&P really needs to get above 1575 to make an all-time high. It is currently near 1560.
In economic news, today's weekly jobless claims were pleasing to the economic bulls. Jobless claims declined by 10,000 to 332,000. This marks the 3rd consecutive reading below the 350k level which was basically the floor for most of last year.
Asian markets were higher overnight. The Bank of New Zealand held rates unchanged at 2.50%. S. Korea's central bank held their rates steady at 2.75%. And Australia's unemployment rate remained at 5.4% vs. expectations for an uptick to 5.5%.
Europe's markets are also higher today. Spanish retail sales fell -10.2%, but this was a smaller decline than expected. In Greece, reports indicate the Troika left without reaching a final agreement on the next tranche of aid.
The dollar is a bit lower today, but commodities are mixed. Oil prices are a touch higher to $92.75. Copper prices are higher also. But gold prices are lower near $1585, silver prices are down, and ag prices are slightly weak as well.
The 10-year yield is hovering around 2.05%, a level its been flirting with for the last 5 days. And the volatility index continues to trade down, now around 11.65. This is a very low level. The last time we saw the VIX this low was April 2007. It's not a perfect timing indicator, but I would expect a selloff in the near future that causes a spike in the VIX from these low levels.
Trading comment: The stairstep market continues, and we are beginning to sound like a broken record. The S&P paused briefly for 2 days and is attempting to work its way higher today. Of course, the longer this steady uptrend continues the more complacent folks will become and that could set the market up for a bigger correction. But as of now we have not seen sentiment get too complacent. The AAII survey of individual investors comes out today, but for the last 2 weeks it has shown more bears than bulls it its survey, a rare occurrence with the markets at fresh highs.