Stocks open flat searching for direction, well off the futures low. European shares closed off the day's low as well, whose bounce has been attributed to the weakening Euro, that doesn't explain U.S. stocks up. People seem to be fading the Greek weakness. Europe rallied into the close with no Greek headlines today...boring! No progress on Greece, but no one cares today. PM Tsipras pointed fingers at ECB in speech to parliament. USD index up 0.2%.
The rumors of health insurance M&A buoyed the market off the lows yesterday, and health insurance stock strength continues today. Health care providers on the leader board for the second day in a row (never mind SCOTUS case King v Burwell).
AET up 4% on report overnight of a rumored bid from UNH. M&A speculation in the health insurance sector is rampant after yesterday swirl of rumors on ANTM bidding $175 for CI, but rebuffed, and interest from all of the above in HUM.
Staples sector leading today's rally. Tobacco stocks on the leader board in response to analyst upgrades. Beverage stocks up too. KO closed MNST deal. Staples never give me that bull feeling. Nonetheless, they are dragging the market higher by it's ear.
German ZEW Survey disappointed on the expectations component registering 31.5 versus consensus 37.0.
U.S. Housing Starts came in mixed; missing on starts, but beating on permits.
Wonder why retail stocks have been so treacherous? Take a look at a simple graph on Redbook which shows a distinct down shift in comp store sales growth in 2015
Notice distinct down shift in comp store sales growth from the 4-5% area in the second half of 2014 to the 1-3% area in 2015.
The big event this week is the FOMC announcement tomorrow at 2pm. Focus risk to desired positioning for tomorrow's announcement. It seems the Greek / flight to quality sellers of stocks and buyers of bonds are exhausted. S&P may grind toward the mid-point, 2095 - 2100, of their super tight trading range.
Stopped out of short 10-year note futures and most of the short front March eurodollar contracts. Tempted to re-establish shorts in both, but will wait until after FOMC.
Still not comfortable with continued sluggish trading in tech and health care (ex-health care providers). Not excited about buying much of anything today except adding to health insurance stocks ANTM, AET and CNC, although these may be complacent on SCOTUS case.