Despite weak and mostly dropping consumers and still feeble and non-laboring data, bulls are finding inspiration from overseas. As of 11:10 ET the S&P500 (SPY) is up 0.40% and fractionally above that closely-played level of interest in still difficult-to-handle intraday conditions.
It's another day in paradise for the non-directional option crowd. Of course, maybe a few bulls still assigning value to the 1000 level after so many volatile and likely unprofitable volleys back and forth in the last couple sessions-are smiling cautiously as well.
Thursday's early stance by bulls is an apparent cheer for a snapback rally in those truncated Asian markets. "Shanghai'ed" indices already demonstrating "red chutes" capabilities in excess of 23% over the past month bounced back in flashy style following two delightful announcements overnight.
For its part the leading laggard and now corrected Shanghai Composite managed to surge nearly 5%. Spurring on the retail crowd looking for bargains, "reassuring comments from a regulator regarding the health of the market" were largely behind the change of investor heart according to Briefing.com.
Further confirmation everything will be honky dory came courtesy of a bullish-sounding report from the OECD. The economic watchdog group announced the global recession is reaching its conclusion sooner than determined in past investor updates. Hurray!
Stateside, the disparity of mostly weak economic data versus still ripe green shoots in the US equity market marches on. Same-store-sales results from America's retailers came in with mostly disappointing declines relative to former and still not-so-great comps from the month and year-ago periods. However, trader reaction, much like with the broader market, is siding with investors looking to shop.
Intraday and spearheading for the bulls, shares of consumer wholesaler Costco (COST) are up 8.50% and hitting their best levels since December of last year near the $55 mark. The bulk discount operator was one of the names that did beat analyst views in coming up with a decline of -2.0% versus estimates of -5.6%.
Goading the bulls, the still weak upside surprise from Costco has enjoyed the added benefit of an upgrade by the influential JP Morgan. Also in the running for "Best in Show" with bulls, influential box outfits Kohl's (KSS), Best Buy (BBY) and the world's largest, Wal-Mart (WMT) are showing flashy relative strength gains of 1.75% to 3.85% in Thursday's first half on mixed results.
Elsewhere, it's still officially a "jobless" something or other with the economy. The green shoots crowd saw further confirmation of a weak labor market in front of Friday's closely-watched monthly jobs data. This morning, initial now "on-the-dole" American's came in above analyst views. To boot, figuratively of course, a fresh count of -570,000 is nothing to write home about, despite being 4,000 less than the prior week's reading.
Finally, continuing claims came in at a still high and above forecast 6.23M as this week's data gained ground. Apparently, those losing benefits were trumped by still growing numbers of American's joining the ranks of the unemployed. The bright spot I suppose is if investors manage to react bullishly to Friday's jobs data, they can "claim" it was discounted thoroughly.
Chris Tyler
Senior Staff Writer & Options Strategist
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