Monday Morning Musings
The market started out of the gate on a higher note, but has since given up its early gains and is now in negative territory. There hasn't been too much in the way of market moving news, and it remains to be seen if the frigid weather across the east might keep volume levels low again.
In economic news, the December ISM Services Index came in below expectations at 53.0 from 53.9 the previous month.
Corporate news has been light save for some analyst upgrades and downgrades.
Commodities are mixed with oil and gold prices little changed near $94 and $1240, respectively.
The 10-year yield is lower to 2.96%, easing back from its spike above 3.0% last week.
Asian markets were lower overnight after a disappointing PMI reading out of China. The HSBC Services PMI fell to 50.9 from 52.5. Also, Moody's warned that the high local government debt levels in China poses risks to the stability efforts of the central government.
European markets are little changed. The Eurozone Services PMI held steady at 51.0. Separately, the Bank of England governor plans to introduce changes to the BoE's forward guidance by reducing the unemployment target to 6.5% from 7.0%.
Despite the reversal in stocks, the volatility index is roughly flat so far near the 13.80 level. This should pickup if the selling intensifies.
Trading comment: Still feels like the market is tired and more of a pullback is in store. We don't get the sense the often discussed 10% pullback is upon us, but investors are still in profit taking mode, the market is just coming off overbought levels, and the pressure to add to equities just isn't there yet. The S&P 500 recently broke out above the 1810-1815 area before it sprinted to new highs. So that former resistance could become initial support on a pullback back near those levels. Currently the SPX sits near 1825. Patience.