Q2 GDP Gets Positive Revision

The market is again flattish near the open but not really giving much back.  This quite action looks to me like more consolidation of recent gains that could lead to another push higher, although I also think the lack of any QE mentions on Friday from Jackson Hole could lead to some short-term disappointment.

In economic news, Q2 GDP got a positive revision from 1.5% to 1.7%.  Separately, pending home sales for July rose 2.4%, which is a big turnaround from the previous month's -1.4% decrease.

Asian stocks were mixed overnight, with China down another -1.0% after the Vice Commerce Minister reiterated that weak exports will weigh on the country's growth objectives.  Last night Joy Global (JOY) missed estimates and lowered guidance due to weakness in both Europe and China.

Europe's markets were lower this morning but have bounced since after ECB President Draghi reiterated that it will do whatever is necessary to maintain price stability.

The dollar index is higher today and weighing on most commodities.  Oil prices are lower to $95.15.  Gold prices are pulling back near $1660.  And silver and copper prices are lower also.

The 10-year yield is higher today to 1.67%.  And the VIX is also higher by 1% to 16.68, which is bumping it right up against its overhead 50-day resistance.

Trading comment: Our market continues to hover near recent highs without giving much back.  Normally this is bullish action, and shows the market is resting and potentially building its internal energy for another push higher.  This comes against a backdrop where global growth continues to slow.  Europe is in recession with austerity measures still taking hold.  And China is slowing with less levers to pull to stimulate growth as easily as it has in the past.  The Shanghai stock market is back to March 2009 lows, which has to be a bad sign in and of itself.  So those are the crosscurrents facing investors today.  It almost feels like a game of musical chairs where investors want to stay in stocks for as long as the music continues to play, but once it stops there could be a rush to the exits. 

KAM Advisors has short positions in JOY