China Tries To Calm Default Concerns

Markets opened higher but have since reversed lower and given up their early gains.  It's still early, so we will have to see if sellers can gain any traction today or if the market drifts higher into the close as seems to be the pattern lately.

In economic news, retail sales for February increased 0.3% after a negative reading in January.

Overnight, Asian markets ended mixed with China bouncing back 1.1%.  Economic data out of China was softer than expected (retail sales, industrial production, fixed asset investment) but the Premier spoke and said the government will not let systemic risks evolve out of the defaults they are seeing.

European markets are little changed today.  New Zealand became the first developed nation to hike rates since the global recession, raising its key interest rate 0.25% to 2.75%.  The Bank of Korea left its rates unchanged at 2.50%.

The 10-year yield is fairly steady so far today at 2.72%.  And the volatility index is up slightly to 14.70.

Commodities are mixed again, but this time its oil trading higher to $98.25 and gold prices easing back to $1367. 

Trading comment: Without any big price action in the markets, we don't have any changes to our near-term investment strategy.  The market continues to trade in narrow ranges with more sideways action than down following rallies.  The longer this goes on the larger the chance that too much complacency sets in a bigger correction ensues at some point.  We are getting closer to quarter end when performance pressure on portfolio managers could result in chasing stocks.  But we wouldn't be surprised to see another pullback of some sort in April.  But for now we are taking things into account as we see them unfold.