Any News Is Good News

The markets started out lower this morning on some disappointing data, but quickly found their footing and so far have reversed higher back into positive territory.  I can't remember ever seeing this type of market resilience.  It's as if any news gets treated as good news, even when it shouldn't.

This morning's economic data was not great.  The Empire manuf. survey for May fell to -1.3 from last month's reading of 3.1.  Expectations were for it to rise to 3.5.  April industrial production fell -0.5%, below expectations.  And capacity utilization came in at 77.8% vs. 78.3% consensus.

Also, European data came out this morning wasn't great.  The Eurozone remains in contraction with Q1 GDP down -0.2%.  Germany ticked up to +0.1% while France was down -0.2% and Italy contracted -0.5%.

Asian markets were higher overnight, with Japan adding to its QE-inspired gains.  The Nikkei is up some 75% from its November lows, prompting the former vice-minister of finance to say the current move in Japanese equities is "somewhat bubbly".

The dollar is higher again today and that is weighing on commodities.  Oil prices are weaker near $92.35.  Gold prices are back below $1400 to $1395.  Silver and copper prices are lower as well.

The 10-year yield is steady at 1.95%, after reversing higher yesterday.  And the VIX continues to hover near that 13 level, implying continued low expectations for near-term volatility.

Trading comment: It's hard to find much to say with the indexes creeping to new highs everyday.  But beneath the indexes we do sense a small rotation out of the highly defensive dividend stocks like utilities and into more growthier type names.  Financials continue to perform well also.  It will be interesting to see if the investor sentiment surveys show any increase in bullishness this week or if folks continue to view this rally with skepticism.