Global markets have been mixed and newsflow has been light. Asian markets rallied late in their sessions after Premier Jiabao suggested that "it is important to promote a reasonable growth in investment". We get an update to Chinese GDP on Friday, and the Premier may be trying to talk up growth as global investors worry about the degree of the slowdown in China.
In Europe, markets are also mixed. Spain's market is more than 1% higher after their PM announced new austerity measures which are expected to trim the country's deficit. Some of the measures include tax hikes and spending cuts, which won't help boost growth but the bond market likes it and Spanish yields have eased back to 6.58%.
There weren't any earnings reports this morning, but electronics retailer HHGregg cut its earnings guidance and the stock is getting hit pretty hard. It is also weighing on BBY. More earnings reports start tomorrow and Friday.
Commodities are mostly higher. Oil prices are up to $85.60, but gold prices are flat near $1577.
The 10-year yield is flat near 1.50%. And the VIX is down slightly around 18.58.
Trading comment: I didn't think it would happen so quickly, but yesterday's decline brought the S&P 500 right back to its 50-day average support. Traders will be watching the 1335 level to see if it can hold. Earnings news has been mostly negative in the first few reports we've heard, and the companies that have warned about slower growth leading to reduced forecasts. That has been my concern coming into this earnings season, and I think it will still play out. There will be some very strong report that lead to big rallies, but I think those will be more the exception than the rule. As such, we are maintaining our defensive asset allocation and would look to add to ETF hedges if 50-day supports give way in the major indexes.
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