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Are Stocks At a Turning Point?

After a great start to the year, are stocks at a turning point? Several companies beat today — ExxonMobil, UPS, Pfizer — but all are trading down. Running out of steam?

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Look below the hood, and not all is as it seems:

1) PFE had poor guidance after rallying to a 4-year high earlier in the month.

2) UPS hit a new high yesterday after rising more than 25 percent in the last four months. The stock is just tired.

3) XOM had good upstream numbers but refining is still tough.

Bottom line about earnings today: not a disaster, but no big beats. And with the S&P rallying 4.1 percent this month, that is a problem.

One thing's for sure: the positive U.S. economic momentum seems to be ebbing a bit. For months, U.S. economic data has outperformed its global competitors. But look at today: Chicago PMI below expectations, consumer sentiment below expectations, S&P/Case-Shiller economic data showing U.S. home prices fell for a third straight month in November.

And look at the disappointing Q4 GDP last week: it was largely inventory building, and not overall growth.

It's worse in Europe, where much of the euro zone (ex-Germany) looks close to recession, thanks largely due to aggressive austerity programs. Unemployment is up everywhere, again with the exception of Germany; Italian unemployment rose to 8.9 percent, highest since the survey began in 2004.

Where does this leave stocks? If the global economy is indeed weakening (including U.S.), stock traders are back to that sorry state of affairs: central bank intervention. I know, it's destabilizing. But that doesn't mean it can't move stocks. It does. You know it does.

That means a huge new 3-year ECBlending facility at the end of the month — traders have been talking about a 1 trillion euro takeup for weeks. The prior 3-year lending facility attracted 489 billion euros at the end of December and is viewed as the primary reason the euro market has stabilized.

Finally, the eternal question: where's the volume? It never picked up in January.

1) forget the VIX, there is still too much uncertainty: "faltering macros here and gigantic financial sector risk in EU and fading confidence that a real fix is in the offing," one trader wrote this morning, explaining why he was trading less.

Another said macro-domination of stocks would continue, and he was not playing as much: "These are now public policy dominated markets with huge tail risks around government competency/incompetency... and with government involved that serves to shorten business cycles and increase volatility over time... so no thanks..."

2) much lower levels of proprietary trading from banks.

3) lower volume begets more lower volume as high frequency traders who depend on volatility to make money also pull back.

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Symbol
Price
 
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%Change
S&P 500
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VIX
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PFE
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UPS
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XOM
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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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