All Stocks, All The Time

The stock market is up this morning for the 12th time in the last 14 sessions.  Forget that the stock market is overbought, and forget that lots of stocks look extended in price and could be vulnerable to pullback.  Money continues to flow into equities and the closer we get to year-end the more we could see performance anxiety kick in and portfolio managers scramble to play catch-up.

In economic news, the Case-Shiller Home Price Index rose 12.8% in August, and that comes on top of a 12.3% gain the prior month.  Pretty strong.  Consumer confidence cooled to 71.2 in September from 80.2 the prior month.  And September retail sales increased +0.4% ex-autos, up from last month's reading of +0.1%.

Earnings reports continue to flow in.  The big report last night was AAPL, which beat estimates but gave slightly conservative guidance.  The stock was higher at the open but has since moved into negative territory by $3 to $526.

Stocks rising on earnings: AAPL, SNP, ECL, DIN, VLO, WM, ACT, PBI, PFE

Stocks falling on earnings: DDD, AGN, GT, VRTX, PCAR, FDP, AGCO, CMI, CVLT, VSH, MWV

Asian markets ended mostly higher, but Japan and China lagged.  The PBOC in China said money market liquidity remains adequate.  But the two-week SHIBOR rate rose again to 6.45%.  India hiked its repo rate 25 bps to 7.75% to curtail inflation but cut another lending rate to bring down the cost of short-term funding for banks.

Europe's markets are higher today.  Spain's retail sales rose 2.2% vs. expectations for a decline.  And Troika officials are en route to Greece to demand new measures in exchange for another tranche of aid.

Commodities are mostly lower.  Oil prices are weaker to $98.30 and gold prices are down a bit near $1350.

The 10-year yield is up slightly to 2.52%.  And the volatility index is steady at 13.37.

Trading comment: We have talked about the market being overbought recently and saying while a pullback would be nice, we might just see sideways consolidation.  But so far the market has continued to add to its gains and make new highs despite being technically overbought.  That makes it tough to chase stocks which have risen a lot recently.  We continue to try to exercise patience and look for individual situations where there are fresh breakouts or pullbacks to logical support areas.

KAM Advisors has long positions in AAPL, DDD