Busy morning for me so far, so I'll have to keep this post brief. The market was already set to open higher after upbeat data out of Europe and Asia had those markets trading higher.
The ADP Employment report was disappointing, as it showed 10,000 private payrolls were shed last month. But that report was overshadowed by the August PMI Manufacturing report that came in much better than expected at 56.3 vs. 52.9 consensus. Moreover, while most have been talking about a slowdown in the economy, August's reading was also up nicely from July's level of 55.5.
The 10-year yield is nicely higher to 2.60%, and the volatility index (VIX) is down -5.9% to 24.51.
Trading comment: I mentioned earlier this week that after Friday's strong rally attempt, investors would be looking for a follow-thru confirmation day sometime this week, where the indexes would rally again on strong volume. Although the last 2 days were weak, they did not undercut Friday's lows (at SPX 1040), which meant that rally attempt was still intact.
Today it looks like we are seeing that confirmation day. The major indexes are up sharply this morning, with the SPX +2.75% and the Nazz +3.15% currently. This is a welcome development in the face of all the negativity we have seen lately. To wit, today's Investor's Intelligence sentiment survey showed the biggest spread of bulls minus bears (29% bulls, 38% bears) since March 2009. It's hard to believe that investors are as negative today as they were in the depths of the bear market.
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