Stocks are inching higher today after breaking out into record
S&P 500 futures are up about 0.1 percent, while most European
indexes are up by more than 0.5 percent. Asia was strong in the
overnight session, led by a 2 percent gain in Tokyo. The Nasdaq
is indicated lower on weak results from tech giant Cisco last
The S&P 500 rose 0.8 percent to 1782 yesterday, escaping from
a range that had held it in check for more than three weeks. The
market has been rallying all year as huge amounts of cash locked
up in bonds migrate into equities. Low inflation and an improving
global economy have also bolstered sentiment.
Attention today will likely focus on Janet Yellen's appearance
before the Senate banking committee at 10 a.m. ET as investors
look for clues on when the Federal Reserve will slow monetary
stimulus. Initial jobless claims also come out at 8:30 a.m. ET.
Japan reported better-than-expected economic growth in the third
quarter, while Europe's matched expectations. The Japanese yen is
down across the board, which usually corresponds with increased
confidence. The U.S. dollar has been advancing against the
currency since early October, which could make some chart
watchers expect further yen weakening--another potentially
bullish catalyst for stocks.
Even during the recent period of consolidation, our researchLAB
market scanner showed strength in stocks that benefit from an
improving economy: retail, industrials, and transports. Within
the financial sector, money has also been flowing into
mutual-fund operators and retail brokerages, which stand to
benefit from a continued bull market. Heavyweights such as Bank
of America, JP Morgan, and Citigroup also appear to be rousing
after several months of consolidation.
West Texas Intermediate crude oil is down slightly while Brent
crude is climbing more than half a percent, a combination of
prices that's potentially bullish for refinery stocks. Gold and
silver are both trying to rebound, while copper is down
fractionally. Agricultural products are mixed.
Aside from the weak yen, greenback strength is the main theme in
foreign-exchange markets, as the greenback climbs against its
European, Canadian and Australian counterparts.
CSCO is the big mover in company-specific news, dropping more
than 10 percent after revenue and guidance missed
I own BAC calls.
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