This morning markets are roughly flat. Energy and materials stocks are strongest while yesterday's winner consumer staples is lagging today.
Last night Alcoa reported earnings, which is generally viewed as the start to earning season. The company issued a mixed report, and it doesn't seem to be coloring the action so far today. Friday we hear from two of the largest banks, which investors will be paying attention to. But next week we will start to hear from more companies and get a sense about forward guidance from them.
In other interesting news, JC Penney ousted CEO Ron Johnson. I was surprised by this news. I knew JCP was doing awful, but I thought the board was giving him more time to execute on his vision. I think the big difference was that at Apple Ron Johnson had products that the public clamored for. So of course the stores were a big success. But at JCP there is no product in high demand, so it doesn't really matter how cool the stores are.
Asian markets were mixed overnight. As China tries to cool property prices is may start requiring larger down payments for second homes. Recently introduced measures have resulted in weekly transactions falling 68% for existing homes.
Europe's markets are trading with modest gains. Germany reported a trade surplus while France reported a larger than expected deficit. Swiss retail sales rose 2.4%. And UK industrial production rose more than expected 1.0% last month.
The dollar is down a little today, which is helping commodities. Gold prices are higher near $1587. Silver and copper prices are also higher. Oil prices are flattish around $93.35.
The 10-year yield is barley positive at 1.73%. And the VIX is up a touch to 13.38 after reversing lower yesterday afternoon.
Trading comment: The small- and mid-cap indexes aren't yet participating in this morning's bounce. And while they closed above their 50-days yesterday, the bounce came on lower volume which means the rally lacked conviction. I would say the jury is still out, and if these leading indexes turn tail and move back below their 50-days it indicates that the market has more work to do consolidating its recent gains.
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