Earnings reports continue to garner positive reactions for the most part. The list of stocks moving higher after reporting includes: KO, SWI, HAR, PRGO, TDG, CSTR, APC, and YUM. A couple of stocks lower on their earnings reports are EMR and GSK.
Asian markets were lower overnight, led by a 1.7% loss in China. Europe's markets are also lower this morning amid continued delays in Greece's acceptance of austerity measures.
The euro is getting a bounce though, with the dollar lower. This is boosting commodities. Oil prices are back above $98 and gold prices are higher near $1735.
The 10-year yield is getting a nice bounce to 1.97%, poking just above its overhead 50-day average. For reference, the January highs were 2.09%. As for the VIX, it was higher earlier on but has since given up its earlier gains and is flat near $17.70.
Trading comment: Buy the dip remains the mantra that has worked so far this year. Investor sentiment continues to grow more bullish, but the indicators I follow are still far from levels that would indicate bullishness has reached extreme levels of too much complacency. Over the last few year, fund flows have been heavily tilted towards bond funds. It could be that we are beginning to see a reallocation out of some of those safety funds into investor allocations that are once again beginning to favor the growth side of the equation more. I know we are having those discussions at our firm, so it wouldn't surprise me to hear its going on at a lot of other firms as well.
KAM Advisors has long positions in EMR, KO, SWI, GLD, YUM
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