Does the torrid pace of sales continue?

US Equities hold on to Friday’s gains. Despite a negative opening fueled by weaker than expected economic data out of China in the overnight and the likelihood of a reversion to the mean on Monday, following Friday’s sharp rally, US equity markets managed to close mixed yesterday.

As unimpressive as the day’s performance appears, yesterday’s mixed results were actually impressive.

Increasingly the bottom that we appear to have put in, in mid-January continues to hold and with each day’s incremental moves away from those lows, markets continue to re-establish an argument for further gains.

The Dow Industrials (-0.11%) and S&P 500 (-0.06%) slipped lower while the NASDAQ (+0.14%) ticked higher. Volume contracted on both the NYSE (-20.50%) and NASDAQ (-23.82%). The Sector Heat Map and market internals reflected a mixed performance as well. In what is increasingly evident, equity investors are becoming conditioned to both volatility and deeply discounted crude prices. Much like to decoupling that manifested in the relationship between Chinese markets and US equity markets in mid-January, Crude’s dominance over US equities appears to be on the wane as well, at least temporarily. The potential decoupling of crude from equities is a positive for US markets – as long as constructive earnings and solid economic data continue to fill that vacuum.

Yesterday’s economic data was mixed as well. Personal Income hit consensus at 0.3%. Spending was flat versus expectations calling for 0.1%. PMI Manufacturing was 52.4 for the month – in line with expectations calling for 52.6. ISM Manufacturing was 48.2 versus revised 48 and consensus 48.3. Construction Spending was the only significant miss on the day coming in at 0.1% versus consensus of 0.6%.

Today’s Economic calendar is light. Motor Vehicle sales will be watched closely as a gauge of consumer appetite.

flickr photo: martin davidsson