GDP Gets Slight Bump For Q4
Markets are mixed to higher in early trading. The second estimate of Q4 GDP was raised from its original estimate of -0.1% to a small gain of +0.1%. The boost came from an upward revision to real final sales which was revised to a gain of 1.7% from 1.1% previously.
Also, the Chicago PMI for February came in above expectations at 56.8, which was also higher than January's reading of 55.6.
Asian markets were higher across the board overnight, expect for India where the government proposed a one-year 10% tax surcharge on high income earners. Japan's PMI rose to 48.5 and its housing starts rose 5.0% last month. China advanced 2.3% on hopes economic activity will pick up.
Europe's markets are slightly higher except for Italy where concerns persist about the new government (or lack thereof). Spain's Q4 GDP contracted -0.8%. And the Eurozone CPI came in at 2.0%.
The euro is slipping today and the dollar is rising. This is weighing on commodities. Gold prices are back down to $1587, and oil prices are a bit lower near $92.60. Copper and silver prices are lower as well, while ag prices look firm.
The 10-year yield is slightly lower at 1.88%. And the VIX is up 1% hovering near the 15.0 level after a big 2-day plunge from the 19 level it closed at on Monday.
Trading comment: The market rallied strongly yesterday, showing surprising resilience following Monday's sharp selloff. Volume wasn't as high as during the selloff, which is a slight knock on the rally. But it's the price action in the end that counts. Fresh breakouts in individual stocks have decreased as many stocks were already extended from strong runups and still need more time to consolidate those recent gains. Overall, the action in the market appears pretty healthy and weakness can be used to add to stocks. We continue to look for opportunities to increase equity allocations at the margin while trimming back plain vanilla fixed income exposure.