The market is slightly higher again in early trading. If you have been trying to fade this market lately, you are likely in a world of frustration.
In economic news, existing home sales rose 5.6% in November, above expectations. The homebuilder ETF (XHB) is higher, and the REIT etf (IYR) is higher as well. Also, final Q3 GDP figures came in at 2.6%, which is slightly higher than earlier estimates of 2.5%.
In corporate news, Nike (NKE) and Walgreens (WAG) both reported solid earnings, but the reactions in the stocks are mixed. WAG is nicely higher, while NKE is selling off. I was also surprised to see TIBX selling off in reaction to better than expected earnings.
The dollar is flat so far, and commodities are mixed. Gold prices are off a bit to $1367, while oil prices continue to climb higher to $90.62. I wonder if investors/consumers will start to worry if oil rises to $100. The more important factor is obviously prices at the pump. I heard my parents talking last night about how gas prices in their town just topped $3, so I know it is on people's minds. Something to keep on the radar.
Asian markets were mixed overnight; the 10-year yield is flat near 3.32%; and the volatility index is another 3.7% lower to 15.88.
Trading comment: The persistent bid under the market remains, as stocks have not sold off one bit lately, and the desire to put money to work into year-end is evident. I have taken some partial profits, but for the most part remain invested into year-end. I do think that we have a correction looming on the horizon, so I want to be prepared. The sentiment indicators I follow are back to levels which have almost always preceded a correction in the past.
long TIBX, VIX calls
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