The only company reporting this morning was Citi (C), which beat estimates and its stock is higher in the weak tape. Visa and Mastercard are both nicely higher after the settlement of their longstanding lawsuit which has been going on for roughly 7 years.
Asian markets were mixed overnight, but China lost -1.7% after its Premier suggested that China's economic recovery may take more time.
Europe's markets are also lower this morning after the ECB is said to be looking to impose losses on bondholders of Spanish banks. That has helped push Spain's stock index to a loss of more than -1.5% this morning.
In economic news, retails sales in the U.S. for June declined -0.5%. The Empire Manuf. Index for July rose to 7.39 from last month's low level of 2.30.
The dollar is firm this morning and commodities are mixed. Oil prices are a bit higher to $87.30, while gold prices are a bit lower near $1590.
The 10-year yield has fallen back near record lows at 1.45% as money continues to flow in Treasuries despite these record low yields.
As for the volatility index (VIX), it has been higher this morning but not by much. It is currently only fractionally higher to 16.85.
Trading comment: This mornings pullback seems to have found some support near the SPX 1350 level. The senior index remains above its 50-day average and looks poised to continue higher unless we get some bad earnings reports that cause a sharp reversal. The volume on Friday's rally was nothing to write home about, and I haven't seen a lot of leading growth stocks breaking out to lead the market. This is another one of those rallies that seems to be led by defensive stocks (utilities, REITs, etc). Those usually don't have the same staying power as a rally led by growth stocks. As such, no change to our intermediate-term outlook to remain defensive in our asset allocations.
KAM Advisors has long positions in MA and V
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