Break Out The Party Hats
The S&P 500 has been hovering near new highs for quite some time now. But today it has finally broken above its 2007 intraday high of 1576. If we close at these levels, I would expect a fresh round of media headlines saying "Market Closes At New Record Highs". And that should make Joe Investor feel like he's missing out on a new bull market and look to put some money to work. Funny how higher prices have a way of making folks feel better about investing, when it should be the opposite.
Today's FOMC minutes got released early, but showed that most members maintained their stance that current asset purchases are likely still beneficial. There are a few members who are beginning to question whether the cost of the programs will start to outweigh the benefits and risks.
Asian markets were mostly higher overnight. Chinese imports surged +14.1%, but the Shanghai market still closed flat on the session. Japan continues to trade higher. And tensions continue to run very high in Korea where Pyongyang might be set to carry out another missile test.
Europe's markets are higher led by a 2.4% spike in Spain. French industrial production rose 0.7%, Spain industrial production fell -6.5%, and Italy's declined -0.8%. The Troika has proposed granting Ireland and Portugal 7-year extensions on their bailout loans.
The dollar index is up slightly. Oil prices are down a bit near $94, gold prices are weaker to $1569, and silver and copper prices are lower also.
The 10-year yield is rising to 1.79%. And the volatility index is roughly flat around 12.83.
Trading comment: The stairstep patter continues, something that we feel like we have been saying all year. While the markets remain overdue for pullback, what we have seen is more of a sector rotation among stocks so that diff groups of stocks have had corrections at different times but not the overall market all at one time. Yesterday the small-cap index didn't participate in the rally, which is normally a red flag. But today the party hats are on, the markets are making new highs, and talk of a correction is being put on the back burner for the time being. Let's hope next week's earnings reports are good or this market could get hit.