The market is slightly higher in early trading, refusing to give back much ground despite being overbought after it recent rally streak.
In economic news, retail sales came in better than expected at +0.8% vs. +0.2% consensus. That’s a nice upside surprise at a juncture when most people think the consumer is pulling back. One standout retailer that reported earnings today was Michael Kors (KORS) who beat both top and bottom line estimates and also raised guidance. It’s stock popped +15% in early trading.
Asian markets were higher overnight after minutes from the Bank of Japan indicated that the central bank was considering further stimulus measures. Also, in India recent inflation figures showed that wholesale inflation fell to its lowest level in almost three years.
In Europe, markets were also higher after some better than expected GDP reports. French GDP came in flat when expectations were for some contraction. Also, German GDP rose +0.3%, which was a bit better than expectations. But overall Eurozone GDP showed a contraction of -0.2%.
The dollar is slightly higher today. And commodities are mixed. Gold prices are weaker to $1603 while oil prices are higher to $93.40. Silver and copper prices are also higher.
The 10-year yield is getting a solid bounce on the retail sales figures, reaching last weeks highs near 1.72%.
And the VIX is bouncing +4% this morning to 14.30 despite the market in positive territory. Yesterday’s dip in the VIX took it back down to very low levels that haven’t been seen since March. So traders may be looking to buy a little volatility protection at these cheap prices.
Trading comment: The old mantra “don’t fight the tape” is in full effect. The market continues to stairstep higher. The Nazz is leading the early action. AAPL has broken out of its recent trading range and is very close to making new highs. GOOG is also trading very well and today just broke to new multi-year highs. You would have to go back to January 2008 to find the stock trading at higher levels. Volume levels have been light, so it’s hard to judge how much conviction is behind the buying. But you can’t ignore the positive price action.
KAM Advisors has long positions in AAPL, GOOG, KORS