There is little in the way of market moving corporate news once again. In economic news, monthly retails sales came in better than expected at +1.1% for February.
The dollar is sporting gains again today, which is weighing on the commodity complex. Oil prices are flattish near $106.35; gold prices have dropped back below the $1700 level, and natural gas prices are down near $2.25; silver prices are lower as well.
Overnight action in Asian was positive, and Europe is showing gains this morning also.
The latest FOMC policy statement will be released later today at 2:15 EST. There is the usual chatter about whether Bernanke will mention more QE3. I doubt we will hear it, and more likely he will reiterate the slow pace of the recovery and that the Fed will remain accomodative.
The 10-year yield is getting a boost to 2.08%, a level that has acted as a ceiling for the last few months. And the VIX is down another -6% today to a 1-year low at 14.65. I think that the move lower in the VIX is getting long in the tooth, and I am now considering buying some volatility as a small hedge in portfolios.
Trading comment: The song remains the same. The market continues to ignore calls for a correction and today is making new recovery highs. We will have to see if the Fed announcement results in a sell the news type of reaction in the market. But judging by the VIX, fear continues to come out of this market. Despite the additions to equities, it is somewhat odd that we have not seen much in the way of outflows or selling of bonds. As such, I would view a breakout in the 10-year yield as a positive in that it could signal a move out of bonds by those who have been glued to the safety trade.
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