U.S. equity futures are trading slightly lower following yesterday’s record close by the S&P 500 Index (SPX). Although we hit all-time highs in a few of the major indices, poor economic data and mediocre earnings do not add up to valuations at this point to many market-watchers. Despite this, the trend is still higher as a downside catalyst is not present at this point. Investors will be examining a large amount of economic data today, including fourth quarter GDP, personal consumption, a Chicago purchasing managers' report, the University of Michigan consumer confidence index, and pending home sales for January. The CBOE Volatility Index (VIX) fell only slightly yesterday as stocks continue to go higher. The S&P 500 benchmark Index (SPX) finally settled above the $1850 level, which had been a resistance level over the past week. Although we are at all-time highs, volatility is still elevated and above $14. The last time the S&P hit highs, the VIX was closer to $12 so traders may still believe a pull-back is due.
Treasuries are a little lower, as are stocks, amid weakness in overseas markets and trading volume was on the light side. Firm Japanese data and flat Euro-zone inflation estimate all weighed on bonds. However there are still some underlying worries over the situation in the Ukraine. Asia finished the session slightly higher. It will be busy last day of February in the U.S. with data on revised Q4 GDP expected to show a lower than expected number due to the weather. There's also Fed-speak from Fisher, Stein, Kocherlakota, and Evans today. The St. Louis Fed chief Bullard has already stated this morning that the economy is fine and any downbeat reports are due to the weather. Next week brings the key data on ISMs and jobs as earnings season winds down.
Stock Stories:
Gap Stores (GPS) –Pleated khakis are out?! – The retailer posted a mixed earnings report yesterday as top-line revenue was lighter than estimates. The company beat on EPS but sales figures going forward remain an issue. The stock is relatively flat ahead of the opening bell.
