Today we are experiencing selling pressure and the market internals are showing more relative weakness than expected after yesterday opening.
This confirms that traders are taking profits from equities and entering into bonds.
Stock futures weakened during the pre-market trading session, leading to a lower open for the broader market. Investors, who have been bombarded with a bevy of earnings reports, have been keeping a watchful eye on the events unfolding in the Ukraine. Of note, S&P cut Russia’s sovereign rating to BBB- last night.
Reports indicate clashes on the eastern part of the country with Russian troops amassed on Ukraine broders. Investors have elected to move into the safety of the dollar and bonds, pushing equities lower. The April Michigan sentiment bounce to an upwardly-revised 84.1 (was 82.6) more than reversed the March drop to 80.0 from 81.6 in February, as the measure narrowed the gap to the 85.1 cycle-high from last July. Michigan sentiment has enjoyed a recent lift from diminishing weather disruptions, rising stock prices, and home price gains. Confidence still faces a headwind from Obamacare, and lingering concerns after last year’s mortgage rate spike. Despite today’s rise, Michigan sentiment continues to underperform consumption and payrolls.
Meanwhile, earnings miss of AMZN has prvoided another reason to sell.