But some early economic data in the U.S. took the wind out of the market's sails. Retail sales came in weaker than expected at 0.1% (vs. 0.4% consensus), and retail sales ex-autos actually fell 0.2% in December. Also, weekly jobless claims were higher than expected.
Back to the ECB, President Draghi held the benchmark rate at 1.00%, but said that substantial downside risks to economic activity in Europe remain.
Asian markets were mostly lower overnight after some Chinese inflation data came in higher than expected. This calls into question just how easy China will become with monetary policy given that inflation is still a problem there.
The dollar is down which is helping commodities. Oil prices are higher near $102.25. Gold prices are also up to $1635. Copper and silver prices are higher as well.
The 10-year yield is getting a small bounce to 1.92%. But the overall low levels on the 10-year do not bode particularly well for an immediate pickup in economic activity.
As for the VIX, it is up 4% in early trading to 21.87. The recent downtrend in the VIX remains intact, despite the ongoing possibility for a move higher in the near-term.
Trading comment: The market continues to put together constructive price/volume action. Pullbacks have been contained well. There is talk about Greece having difficulty making its upcoming debt payments. This could cause the whole Euro debt issue to flare up again, as we know it hasn't been solved by any means. The market seems to be calm right now with those issues, perceiving that the 'kick the can' policies are effective. But at some point I expect the whole thing to flare up again. That may not be today's agenda, but it is something to keep in mind as investor adjust their asset allocations. We still have some hedges on just in case.
KAM Advisors and/or clients are long GLD, SCO, SH
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