Monday, February 10, 2014

Monday Morning Musings

Markets are mixed this morning in lackluster trading.  There are no economic reports to speak of and no real catalysts to move stocks thus far.  The S&P 500 is down modestly in early trading while the Nasdaq is higher.

AAPL shares continue to trade up despite Carl Icahn saying it might not be worth continuing to pursue the share buyback push.

Bond yields are pretty flat with the 10-year yield at 2.67%.

The volatility index is getting a little boost, up 2.5% to 15.65.  But this 15 level is pretty much a mid-level figure for the VIX and isn't indicating any expectations for a big pickup in volatility in the short-term.

Gold prices are higher again to $1275.  And oil prices have moved back to the $100 level, something we haven't seen in awhile.

Asian markets were mixed overnight, with some pressure coming from a rise in the Yen again.  The State Council in China reiterated its growth forecast remains 7.5% for 2014.

Europe's markets are slightly higher on the day.  Bank stocks have been pressured by ECB comments that weak banks need to fail the upcoming stress tests for the tests to be considered credible.  Elsewhere, Eurozone investor confidence rose to 13.3 from 11.9.

Trading comment: Last week we saw the markets bounce sharply from Monday's big selloff, as stocks reached deeply oversold levels.  We said that following such oversold conditions stocks almost always bounce, but that wouldn't necessarily mark the bottom for buying.  Each day of the bounce last week came on lighter volume that we would like to see.  Such weak volume bounces can be vulnerable, and this week we will have to see if the market can continue to build a base around these SPX 1780-1790 levels, or if it needs to probe further downside again.  Either way, we are still sitting tight as it likely remains to early to start committing cash in any serious way.


Post a Comment

<< Home