The market is off to the races this morning, aided by some strong economic reports. I think people are looking for a big number in tomorrow's jobs report. Let's hope they're not disappointed.
The futures were already higher this morning after gains in both Asian and Europe. Asian markets were mostly higher, but China was not. China's non-manufacturing PMI Index fell in February to its lowest reading in two years.
In Europe, the ECB left its target rate at 1.0%, and Trichet hinted that prices are rising and a hike could be in the cards in the future. This spurred a rally in the euro, at the expense of the dollar.
In the U.S., weekly jobless claims fell again, to 368,000. This marks the third week under 400k. Also, the ISM Services Index rose to 59.7 in February, its highest reading since 2005. I have been talking about how strong the manufacturing sector is, but this strength in the services sector bodes well for the economy.
Oil prices are lower today, thought still above $100, after Libya has entered peace talks. Gold prices are also lower to $1420.
The 10-year yield is rallying to 3.55%; and the VIX is plunging 9% to 18.85.
Trading comment: The market is clearly showing its resilience again this morning, especially considering oil is still above $100 and things have not really calmed down in the Middle East. Also, while the market is up a lot this morning, the most important thing is how it closes. So we need to see these early gains stick. If that happens, it certainly would alter my thinking about how much more downside is in store for the market.
Lots of market leaders have held up well, and some are even breaking out to new highs again (see PNRA, ALXN, APKT, RVBD, CIEN, HMSY, etc). Color me surprised. But that's why they call it trading, and not (as Charlie Sheen would say) "winning".
3 Mart 2011 Perşembe
Fed Under Fire: One-on-One with Ron Paul
Fierce Fed critic Rep. Ron Paul (R-TX), head of the House Financial Services Committee, discusses his back-and-forth with Fed head Ben Bernanke over U.S. monetary policy.
2 Mart 2011 Çarşamba
On CNBC's Kudlow Report Tonight
Tonight at 7pm ET:THE MARKETS
- Jeff Kleintop, LPL Financial Chief Market Strategist
- Larry Glazer, Co-Founder of Mayflower Advisors
- Jim Iuorio, Options Action Contributor; Director, TJM Institutional Services
OIL SPIKES HIGHER ON MIDEAST JITTERS
- Peter Beutel, Cameron Hanover President
- John Kilduff, CNBC contributor
ONE-ON-ONE WITH RON PAUL … SHOULD BERNANKE START TIGHTENING?
- Rep. Ron Paul, (R) Texas; Budget Cmte. Chair; House Ways & Means Cmte. Sr. Member
WHAT HAPPENED TO THE WASHINGTON'S $60B SPENDING CUT PLEDGE?
- Matt Miller, Washington Post Online Columnist; Public Radio's "Left, Right and Center" Host
- Rep. Tom Price, (R) Georgia
Please join us at 7pm ET on CNBC.
A Change Of Character For The Market
The market is getting a bounce in early trading, although oil is up again so it remains to be seen if today's early strength will hold.
Oil is higher again amid continued fighting in Libya as well as turmoil in North Africa. Saudi Arabia's stock market fell 4% after suffering a 7% drop in the prior session. Oil is currently up another $1.50 to $101. The longer oil stays high, the more it will begin to effect the economy and transportation sectors.
In economic news, the ADP Employment report came in much better than expected as private payrolls grew by 217,000, and January numbers saw upward revisions. This could bode well for a strong payrolls report on Friday, although sometimes the big monthly jobs report does not follow ADP's numbers.
Asian markets were down overnight; the dollar is also lower today, which is boosting gold prices to $1435, and cotton futures were limit up again; the 10-year yield is higher to 4.36%; and the VIX is down 4% back to 20.10 after a big spike higher yesterday to 21.0.
Trading comment: Lately we've seen the market firm in early trading, but selloff as the day wears on with the market closing at or near its lows. If this continues, it would mark a change of character for the market from the last several months. During that time span, the market was often weak early, but would then rally and close near its highs for the day. Closing at its highs is a hallmark of bulls markets, while late-day selloffs are more common during corrections.
Yesterday's selloff was met with higher volume on the Nasdaq, making for a 5th distribution day in recent weeks. This also increases the likelihood that the market has more work to do on the downside before this correction runs it course. Be patient.
Oil is higher again amid continued fighting in Libya as well as turmoil in North Africa. Saudi Arabia's stock market fell 4% after suffering a 7% drop in the prior session. Oil is currently up another $1.50 to $101. The longer oil stays high, the more it will begin to effect the economy and transportation sectors.
In economic news, the ADP Employment report came in much better than expected as private payrolls grew by 217,000, and January numbers saw upward revisions. This could bode well for a strong payrolls report on Friday, although sometimes the big monthly jobs report does not follow ADP's numbers.
Asian markets were down overnight; the dollar is also lower today, which is boosting gold prices to $1435, and cotton futures were limit up again; the 10-year yield is higher to 4.36%; and the VIX is down 4% back to 20.10 after a big spike higher yesterday to 21.0.
Trading comment: Lately we've seen the market firm in early trading, but selloff as the day wears on with the market closing at or near its lows. If this continues, it would mark a change of character for the market from the last several months. During that time span, the market was often weak early, but would then rally and close near its highs for the day. Closing at its highs is a hallmark of bulls markets, while late-day selloffs are more common during corrections.
Yesterday's selloff was met with higher volume on the Nasdaq, making for a 5th distribution day in recent weeks. This also increases the likelihood that the market has more work to do on the downside before this correction runs it course. Be patient.
1 Mart 2011 Salı
On CNBC's Kudlow Report Tonight
Tonight at 7pm ET:THE MARKETS
- Keith McCullough, Founder & CEO of Hedgeye Risk Management
- David Joy, Columbia Management Chief Market Strategist
- James Altucher, Formula Capital Managing Director
WISCONSIN BUDGET BATTLE
- Mike Taibbi, NBC News - Madison, WI
STATE BUDGETS VS. UNIONS: SCOTT WALKER II
- Gov. Jon Kasich (R) Ohio
IS BERNANKE IN DENIAL ABOUT INFLATION?
- Robert Reich, Fmr. Labor Secretary; "Aftershock: The Next Economy and America's Future" author; CNBC Contributor; Univ. of CA., Berkeley, Prof.
- Steve Forbes, Forbes Chairman and CEO; Forbes Editor-in-Chief; Fmr. Presidential Candidate; "How Capitalism Will Save Us" Co-Author
WAVE OF REVOLUTION : OMAN, JORDAN; SAUDI ARABIA, ETC.
- NBC’s Stephanie Gosk reports.
INSIDER TRADING: EX-GOLDMAN SACHS DIRECTOR CHARGED IN GALLEON INSIDE TRADE PROBE … SHOULD INSIDER TRADING BE LEGAL?
- John Tamny, RealClearMarkets and Forbes Opinions Editor
- Joe Tacopina, Criminal Defense Attorney
GUPTA CHARGES COULD BE AS BIG OR BIGGER THAN MADOFF?
- CNBC’s John Carney
- John Tamny, RealClearMarkets and Forbes Opinions Editor - DC/4001 Nebraska
- Joe Tacopina, Criminal Defense Attorney
Please join us at 7pm ET on CNBC.
Mideast Tensions Remain At The Forefront
The market is lower in early trading, despite the futures being higher this morning before the market opened. Chairman Bernanke is testifying before Congress right now, but there is little new information in his remarks.
Of more interest is the continued geopolitical tensions in the Middle East, particularly Saudi Arabia today. Reports are that Saudi has sent tanks into neighboring Bahrain. Of all the countries where news can cause a spike in oil, Saudi Arabia is probably the most sensitive. Currently, oil prices are $1.35 higher to $98.40. Gold prices are higher today also, near $1422.
In economic news, the ISM Manufacturing Index came in at 61.4 for February. Not only is that better than expected, it marks the highest reading since 2004. So for the folks who see few positives on the horizon, the manufacturing sector has come roaring back during this recovery.
The dollar is firm today, and commodities are mixed; the 10-year yield is higher to 3.45%; and the VIX is 2% higher to 18.75.
Trading comment: It is normal for the markets to bounce after becoming oversold and nearing support levels. But this latest pullback is only a little over one week old, and I think it has more work to do in terms of both time and price. That is, most corrections during bull markets take approx. 3-6 weeks to fully run their course. And so far, the SPX has only pulled back -3.7% from peak to trough. Given the spike in oil and the real concerns in the Mideast, I would think a normal correction in the 5-10% range might be expected. So I want to continue to manage my risk, adhere to stop-losses, and look for opportunities to add to stocks that just reported strong earnings but are pulling back with the overall market.
Of more interest is the continued geopolitical tensions in the Middle East, particularly Saudi Arabia today. Reports are that Saudi has sent tanks into neighboring Bahrain. Of all the countries where news can cause a spike in oil, Saudi Arabia is probably the most sensitive. Currently, oil prices are $1.35 higher to $98.40. Gold prices are higher today also, near $1422.
In economic news, the ISM Manufacturing Index came in at 61.4 for February. Not only is that better than expected, it marks the highest reading since 2004. So for the folks who see few positives on the horizon, the manufacturing sector has come roaring back during this recovery.
The dollar is firm today, and commodities are mixed; the 10-year yield is higher to 3.45%; and the VIX is 2% higher to 18.75.
Trading comment: It is normal for the markets to bounce after becoming oversold and nearing support levels. But this latest pullback is only a little over one week old, and I think it has more work to do in terms of both time and price. That is, most corrections during bull markets take approx. 3-6 weeks to fully run their course. And so far, the SPX has only pulled back -3.7% from peak to trough. Given the spike in oil and the real concerns in the Mideast, I would think a normal correction in the 5-10% range might be expected. So I want to continue to manage my risk, adhere to stop-losses, and look for opportunities to add to stocks that just reported strong earnings but are pulling back with the overall market.
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