U.S. equity futures are trading slightly higher ahead of the President’s Day weekend. Yesterday saw more gains for stocks despite the negative economic data. Stocks opened sharply lower but the Bulls had other ideas as equities quickly caught a bid. Volatility was higher at the open but finished the session relatively flat. The CBOE Volatility Index (VIX) looks to be trending back towards the $12 level again but the economic data and earnings do not seem to support it. The new rumor making the rounds has the Fed backing off its Taper plans based on slower economic growth and the weather.
Treasuries are little changed to fractionally higher this morning. Bonds finished yesterday quite strong despite the rally in stocks. The disconnect between stocks and bond prices will eventually diverge, but right now they seem to rise in tandem. Stocks overseas slumped led by Japan's fall, but losses were mostly undone after better than expected Euro-zone Q4 GDP data helped boost equities. There's more data on the U.S. calendar today that could help underpin bonds, including January trade prices. Soft inflation figures have helped push up core European bonds in recent sessions. Also due out today is January industrial production and preliminary consumer sentiment for February. Markets are closed on Monday for the President’s Day Holiday.
Stock Stories:
Southwest Airlines (LUV) –No LOVE – The airline industry has seen over 16K flights cancelled this week as the East Coast gets pounded by another storm. The industry can sometimes squeeze out some revenue from the causal traveler but the business travel losses cannot usually be recouped.
