The first economic report was durable goods. The headline figure showed a decrease of -5.2%, but this was due to a sharp 46% drop in defense aircraft orders. Excluding transportation, durable goods rose a solid 1.9% in January.
The second piece of data was pending home sales for January, which rose 4.5% on top of last month's 4.3% rise. Today's home sales data was much better than expected.
Asian markets ended mostly higher. Hong Kong's GDP rose 1.2%. Taiwan industrial production surged 19.2%. And Japanese retail sales declined -1.1%.
Europe's markets are slightly positive following selling off the last 2 days. Italy auctioned off debt which met its target, but yields were about 70 basis points higher than previous auctions. We have been highlight the Italian election because of its market impact. Yesterday a top German economic advisors said that the results of the Italian election could cause the euro crisis to return "with a vengeance".
The dollar is lower today, but not helping precious metals. Gold prices are lower to $1602, and silver and copper are lower as well. Ag prices are up a bit and oil is a tad higher near $92.75.
The 10-year yield is roughly flat at 1.87%. And the VIX continues to fall from its Monday highs, down another 11% today back below the 15 level. Quite a turnaround.
Trading comment: The market is nicely higher for a second day. But yesterday's gains came on lighter volume, and it's still early in the trading session today. Monday's high volume reversal is likely to take more than a few days to be erased. I continue to think that at the very least the market has more work to to in terms of time with this recent pullback/consolidation. As such, we are not inclined to chase this 2-day bounce, but would rather look for further weakness to use as a buying opportunity, possibly as the S&P 500 approaches its 50-day support.
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