Markets may be throwing in the towel on the idea of a stock pullback. At least that's what it looks like. I know, what pullback? Between the Dow's historic intraday high on July 23rd to the intraday low on July 25th, there was only a drop of 1.3 percent...we can't even get a five percent pullback anymore!
Why not? First, stock volume in July has been light — not just seasonally light, but July 2013 volume is well below July 2012 volume. That means there is no avalanche of buying or selling interest. Second, with a roughly 5 percent gain in the S&P 500, it's clear that what selling occurred was met with new buyers standing in the wings.
Why? Perhaps most importantly, the trading community has become more comfortable with the Federal Reserve tapering its massive bond buying. There's a belief the economy can handle it, and the Fed has done a reasonably good job of assuring everyone the tapering will be very gradual.
Good news is good news, finally? If nonfarm payrolls comes in above consensus (currently around 183,000), and particularly if it comes in above 200,000, it will likely suck more money into stocks. That may happen even if the 10-year Treasury yield moves up. We saw that Wednesday when the ADP report came in better than expected...10-year yields rose, but the stock market did not fall apart. Good news may be good news for stocks.
Car sales numbers will be out later today, and given that some (read Ford) have increased the number of shifts, we should see a significant number. Ford's July U.S. sales were up 11 percent, its best July since 2006.
Overall, Domestic Auto Sales expected at 5.7 million, if we get over June's 5.71 million it will be the highest since September 2005. And it gets better: thanks to the growth in oil/natural gas and construction, domestic light truck sales are expected at 6.7 million; if that beats the June number of 6.71 million, it will be the highest level since October 2007.
1) You're killing me, ExxonMobil! The world's biggest (and, until today, the most valuable) posted a big earnings miss this morning, which has played havoc with S&P 500 earnings expectations since XOM is the biggest stock in the S&P 500. Second quarter earnings expectations for the S&P 500 have gone from a 5 percent gain to a 4.3 percent gain this morning — all because of XOM.
What happened? Refining was a disaster: "Weaker refining margins and volumes associated with planned refinery turnaround and maintenance negatively impacted downstream earnings," the oil giant said in a statement.
2) It wasn't all bad news in energy land: the big news today is that a new zone in the Permian (Texas) was successful: this will mean even more oil for the United States. Pioneer Natural Resources will be a big beneficiary.
3) it wasn't a popular topic, but Europe had a great July as well, with many countries up five percent or more. Euro zone manufacturing data saw improvement in most countries, and the European Central Bank's Mario Draghi pulled a scene from the Bernanke playbook by emphasizing that rates were not going to be rising any time soon.
"Current data confirm our baseline scenario and the risks are on the downside, so the evidence would have to be significantly better than our current baseline ... for us to change guidance," Mr. Draghi stated.
In Asia, Japan has stabilized, and Chinese PMI numbers came out better than expected.
—By CNBC's Bob Pisani