Asian markets were down across the board overnight. Tensions are still running high in the East China Sea with Japan shutting factories amid worries about violent protests. Additionally, Chinese housing data recently showed that 53 of 70 cities showed year-over-year declines. That's a pretty big figure. Also the Reserve Bank of Australia in its recent minutes noted a weakening of the Chinese economy.
In Europe, markets were also down across the board as the focus turns back to Spain and whether they will request a full bailout. A recent ZEW pull suggests the German economy is expected to lose momentum over the next six months. George Soros was out with comments over the weekend supporting the same notion. Germany has been the lone pillar of economic strength in the southern eurozone, so if their economy weakens you can expect the recession in the region to deepen.
In the US, the NAHB Housing Index rose to a reading of 40 in September, above last month's views.
Separately, FedEx (FDX) is lower this morning after beating earnings but issuing disappointing full-year guidance for 2013.
The dollar index is higher today, but commodities are mixed. Gold prices are higher to $1773, and silver and copper prices are higher also. Oil prices remain a bit weak at $96.22 after a big negative reversal yesterday that left many scratching their head.
The 10-year yield is easing back more to 1.80%. And the VIX is down -1.75% today despite the negative headlines and weak open. The VIX is hovering near very low levels at 14.30.
Trading comment: Yesterday's pullback was extremely mild. It started to pick up a little steam in the afternoon but then rallied back in the last hour to post little damage by the close. Today is looking similar, though we still have a lot of time left in today's session. If the market can't pull back much, dip buyers may grow impatient and look to put money to work sooner rather than later. Recent leaders like AAPL and GOOG haven't given back any ground and remain near their highs. Ditto AMZN, ALXN, BIIB, etc. The NYSE registered nearly 500 new highs last week, so the list of potential market leaders has certainly broadened recently. Now we just need to watch to see which ones can continue to add to those gains.
KAM Advisors has long positions in AAPL, ALXN, BIIB, GOOG
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