Opinion on  General Motors Corp (GM)     Sector: Consumer Cyclical  >  Industry: Auto & Truck Manufacturers
Nice Bounce In Early Trading

The market is enjoying a nice bounce in the first hour of trading. Of course, I am always skeptical of strong market opens.

McDonald's (MCD) raised its dividend by 50%, and GM got upgraded to Buy at Citigroup (C). Both of these seem to be aiding investor sentiment.

Currently, the S&P 500 is approaching overhead resistance at its 50-day moving average. Let's call it SPX 1482. I think this is a key level to watch. If the market can break above this level, it could spur some short-covering on a squeeze.

Oil is still near record levels, hovering just below $80. Bond yields are up a bit, with the 10-year yield at 4.44%. And Asian markets were mostly higher overnight, with Hong Kong hitting new record levels.

I am glad I don't have a position either way in GM. After plunging when talks were called off, this morning comes the news that GM and the UAW have reached a tentative agreement. Didn't they have a "tentative" agreement before?

Anyway, that has the stock gapping higher. I am sure there are a lot of shorts in this stock, and that could exacerbate any move.

Asian markets were mixed overnight, with Shanghai pulling back on fears about monetary tightening, while most other markets were higher (record high in India). As for the Yen, it is lower today, and bouncing off its uptrend line. This should help our markets.

Oil is also lower this morning, breaking below $80 after the inventory data today showed a build in crude inventories. Oil has been on a big run, and could be due for rest.

Bond yields are up a bit, with the 10-year yield at 4.65%. I don't mind seeing the 10-year creep a bit higher, as it likely indicates that any recession is further out in time than most of the bears are predicting.