Stock futures are quiet as investors sit back and watch the geopolitical events in Ukraine play out, while growing anxious about global growth. Recent data out of China has indicated that its economy is slowing. The downbeat data out of the world's second largest economy has had a negative impact on world markets, but the U.S. seems to shrug off the warnings once again. The CBOE Volatility Index (VIX) sits near $14 again and should remain muted unless activity picks up in the Ukraine. The small-cap Russell 2000 Index (RUT) last week saw a P/E ratio of over 80 compared last week with a 33 level a year ago. In comparison, the S&P 500 Index (SPX) has a P/E ratio of about 18. The small caps sit just under all-time highs and may be over-extended at this point.
U.S. Treasuries are little changed with the benchmark 10-year yield still in a tight range at the 2.78% level. Overseas bonds are mostly higher, albeit with small gains. European stocks are posting modest losses with the exception of the German DAX. Ukraine uncertainty remains a focal point to keep a bid in bonds as investors are weary of putting on risk. The Bank of Japan maintained a steady policy base with a 0.10% rate and will continue to expand its monetary base at the current high level. Germany's trade surplus dipped slightly while U.K. industrial production was close to expectations. There's not much on the U.S. calendar. Data includes just weekly chain store sales, January wholesale trade, and January JOLTS figures. The $64 B in coupon auctions this week kicks off with the 3-year sale.
Stock Stories:
Macy’s (M) –Leading – The retailer gets an upgrade today as the company is the clear leader in the mid-tier department store sector. Lower margins and a downbeat sales quarter has retailers struggling but Macy’s is out-performing. The stock is slightly higher today and is near all-time highs.
Major Economic Reports:
6:30 am CT –NFIB Small Business Index
6:45 am CT – GS Store Sales – up 1.3% for the week
