The ADP report was a positive surprise, as private payrolls increased by 157,000 vs. consensus estimates of only 60,000. Friday is the big jobs report, and the ADP doesn't always correlate that well to the monthly employment report, but hopefully it will be directionally right this time.
Asian markets were mixed overnight, but Europe was higher this morning after the ECB raised its target lending rate by 25 basis points to 1.50%. The Bank of England opted to stand pat at 0.50% and maintain its current 200 billion pound asset purchase plan.
Retail stocks are getting a big boost from a round of better-than-expected same-store sales reports for June. Financials are also rebounding from yesterday's weakness and leading the market so far.
Oil prices are higher to $98.60, while gold prices are flattish near $1529.
The 10-year yield is higher to 3.17%; and the VIX is down -3.3% to 15.80.
Trading comment: The chart below shows how quickly the SPX has rallied through resistance. The pink line represents recent resistance levels, and you can see that the SPX is now above those levels. The index is also well above its 50-day average now. These are both good signs for the market. We are overbought here, so I would not be surprised to see some consolidation, but more and more stocks are breaking out so its time to look for new leadership in the market.
Summer isn't usually the time for big market rallies, so I want to be a little cautious. But it's hard to argue with the market action.
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