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July 12, 2013  Fri 7:12 AM CT

SPX: SEE CHART GET CHAIN FIND STRATEGIES
Stocks are fractionally higher this morning after closing at an all-time high yesterday.

Bank earnings are the main events today as JP Morgan and Wells Fargo announce quarterly results. JPM beat expectations and is trading modestly higher. WFC is down slightly after reporting minutes ago.

European markets rose by half a percent to a full percentage point. Asian markets were mostly lower in the overnight session as investors took profits after yesterday's big rally in China.

The S&P 500 ended yesterday at 1675. While that's 6 points above the previous closing high from May 21, it remains 12 percent below the previous intraday high of 1687 the next day. Investors must now decide whether to buy now with the index up almost 4 percent in the last two weeks or wait for a pullback.

The market has been trending strongly higher as the economy shows its best signs of life since the middle of the last decade and as years of pessimism toward equities lifts. Stocks remain relatively underowned by many investors, and we appear to be in the midst of a secular shift away from fixed income and into equities.

Our researchLAB analytics tool shows widespread buying across many industries, with consumer-discretionary stocks that benefit from higher incomes and a stronger economy leading the gains. More recently, materials, metals, and coal companies have been trying to rebound from long-term lows.

Homebuilders also surged yesterday on indications that borrowing costs will decline. They have been moving sideways most of the year after a huge rally in 2012.

Oil is also inching higher today, although copper and precious metals are pulling back after rallying yesterday. Currencies are painting a cautious picture as the euro declines and the Australian dollar falls by more than 1 percent.

In company-specific news, Aveo Pharmaceuticals is indicated to fall after receiving a subpoena from the Securities and Exchange Commission regarding the June 10 rejection of its tivozanib drug. Spreadtrum Communications also agreed to a $1.78 billion takeover offer, valuing the company for 17 percent over yesterday's close.
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