Stocks Reverse Early Weakness
Stocks opened this morning on a down note following weak overseas action and some weak economic data. But within an hour or so stocks managed to reverse all of their early losses and move into positive territory. Of course, it's still early.
In economic news, retail sales for January fell -0.4% and this weakness worried investors. But as the news sunk in it seems many are willing to asterisk the data as being impacted by the severe weather. Guess we will have to wait until probably March for a rebound, as the severe weather continues this month in many parts of the country.
Asian markets were weak overnight. We seem to be back in that scenario where folks are watching the yen and seeing any yen strength as more reason to unwind the global "carry trade". The yen was higher overnight and Japan was down by -1.8%.
In corporate news, several stocks of companies that reported earnings last night are trading lower today. Those include PEP, CSCO, WFM, and Z.
The 10-year yield is down slightly to 2.75%. And the volatility index is lower again to 14.11, still hovering below that 15 level that for the last year has coincided with uptrends in the market.
Oil prices are off slightly but still above the $100 mark. And gold is trying to close in on the 1300 level, sitting at $1298 right now.
Trading comment: We noted the other day that the SPX had knifed through its overhead 50-day average, and that if former resistance becomes support the 50-day should hold when the SPX comes back down to test it. True to form, this morning the S&P 500 opened lower and found support right at its 50-day average. From there it bounced and is working on putting in a positive reversal day. But it's still early and emerging markets are still weak, so we will have to see if this early reversal is sustainable. We did a little buying yesterday looking for fresh breakouts that could lead during the next uptrend.