Stocks Follow European Lead And Rally
Stocks are higher in early trading after a lackluster start to the new quarter yesterday. In economic news, factory orders rose 3.0% for February which was better than expected.
Healthcare stocks are leading the early action after the Centers for Medicare announced a 2014 rate increase for prescription drug benefits. Stocks like HUM, UNH, etc. are up more than 5% on the day.
Asian markets were mixed overnight. Japan reported its monetary base expanded 19.8% vs. last year. The Reserve Bank of Australia left its key interest rate unchanged at 3.00%. They also said there may be room for more cuts as inflation remains tame.
Europe's markets rallied nicely this morning on the heels of some manufacturing data that was released. Overall the eurozone manuf. PMI came in above expectations at 46.8. Eurozone unemployment was reported at an all-time high of 12.0%. French PMI was 44.0, Germany 49.0, Italy 44.5, etc. The notable trend here is that all of the readings are still below the key 50 level that marks the difference between expansion and contraction.
The dollar index is higher today and weighing on commodities. Gold prices are lower to $1580. Silver and copper prices are also lower. Oil prices are down near $96.48 and gasoline is also lower. Gas prices at the pump here in LA are still above $4 a gallon, but hopefully the recent tick down is gasoline futures will translate into lower prices at the pump.
The 10-year yield is higher today to 1.86%. And the VIX is down nearly 5% back below the 13 level.
Trading comment: This market continues to frustrate those looking for a better buying opportunity. Many stocks remain extended on the charts but refuse to pull back. The same can be said for most of the major indexes. The S&P 500 is now within striking distance of its all-time highs from 2007. That could lead to another round of buying or short covering. The remains due for a correction, but the timing of which remains elusive. Better to add to stocks that have at least consolidated recently while saving some cash to put to work if we do get a better pullback.