The market is down slightly in early trading, but there is not much in the way of newsflow. Volume will already likely be light this week after the Christmas holiday and before New Years eve on Friday. And with the giant snowstorms in New York, trading may even by lighter than usual.
The big news over the weekend was China's central bank announcing another 25-basis point rate hike, aimed at keeping inflation at bay. China's stock market fell -1.9% after the news. Japan had already closed with a gain, but I suspect most Asian markets will be lower in their first open session following the news.
Also look for retailers to be in focus as they start to leak initial reports of how strong or weak holiday sales were. So far, financials are leading the action in what looks to be like some sector rotation into a group that has lagged for several months.
The dollar is slightly lower today, and most commodities are lower as well. Oil prices are down a bit to $90.70, while gold prices are slightly higher near $1381.
The 10-year yield is higher again to 3.42%; and the volatility index is up nearly 9% to 17.95.
Trading comment: The market seems to be hanging in well on news of a rate hike in China, and Europe lower today as well. I think a lot of people are just trying to hang in there and let the remaining minutes for 2010 tick off the clock before making any big bets or repositioning portfolios for 2011. As such, I expect volume to pick up materially next week. But for now, I think most managers are just protecting their gains.
long VIX
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