Market rally holds...why? It's a sign of the times...and a sign of how unloved this rally is...that traders on the floor were asking me why stocks are so strong this morning.
There isn't a single reason, but there are several reasons why stocks are strong:
First, with so many traders shorting Russell-2000 type names, there may be a bit of short squeeze occurring, as momentum names are stable. The NASDAQ Internet Index (QNET) is up nearly three percent today. The SPDR Biotech ETF (XBI) has also stabilized over the past couple weeks and is up three percent today.
Second, bonds are higher across the globe, with the 10-year Treasury safely above 2.60 percent, now at 2.65 percent.
Third, China and India had a strong showing overnight. Chinese stocks had a two percent pop on speculation authorities would open up more of the domestic stock market to foreign investors.
India popped another 2.5 percent to close at yet another historic high as the national elections have finally concluded; it appears pro-market proponent Narendra Modi is ahead in the opinion polls, with final results due May 16.
Fourth, Ukraine is relatively quiet, despite the EU declaring the referendum illegal.
As for economic data, it's a big week, with CPI, PPI, April Industrial Production, and April Housing Starts. Sure would be nice to get an upside surprise for April Retail Sales tomorrow, looking for an 0.4 percent increase over March.