Monday Morning Musings
Stocks opened on a higher note this morning with the S&P 500 eclipsing the 1800 level to set a new record. The strength likely washed up from overseas as their markets were higher overnight. Since the open, the SPX has drifted back below the 1800 area. But it's still early.
In economic news, the November NAHB Housing Market Index slipped to 54 from 55 last month. That marks a 4-month low for this series as homebuilders cite rising construction costs.
Asian markets were higher overnight led by China and Hong Kong, after the reforms announced by China last week. China's house prices also rose 9.6% last month. Moody's said that the direction of the current Chinese reform is a positive for the country's sovereign rating.
Europe's markets are also higher. Germany's House Price Index rose 0.8%. And Italy's PM said that he expects the country to return to growth next year and post GDP growth of 1.4%.
Commodities are weaker with gold pries lower to $1280 and oil prices slightly lower around $93.75.
The 10-year yield is easing back further to 2.67%.
The volatility index is nearly 5% higher today to 12.75, still a very low level after it touched the 12 level on Friday.
Trading comment: For the last couple weeks we have been saying that due to the mostly sideways consolidation in the major indexes that it was becoming more likely that instead of a deeper pullback we could see another breakout. That is exactly what took place last week as the S&P 500 topped the 1275 level that had been acting as resistance and quickly climbed to the 1800 level where we sit today. We looked for some opportunities last week to put more money to work and continue to operate under that strategy. Pullbacks continue to be shallow sideways affairs as more participants put money to work in equities and reallocate away from fixed income.