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The market has opened under pressure during the first hour of trading, and barring a big upside reversal it looks like the indices will finish lower for the week.

The 10-year yield continues to plunge, falling to 4.60% this morning. The bond market is the best predictor of future inflation, and as I have been saying for quite some time, it has been signaling more concern about future growth rather than inflation.

It seems that more market participants are now coming around to this point of view, and that weighing on yields. There is also likely some short covering going on in the bond market, at the margin.

In other news and notes:

• PALM lowered Q2 guidance, announces buyback
• SBUX to raise coffee prices next month
• BSX misses earnings, stock gaps lower
• MSFT refunds repair costs for Xbox users
• WMT warns studios about movie downloads
• New CDC recommendations on HIV positive for GILD

Technicians will be asking if the SPX has put in a double top, since it reached its May highs and has now backed off. But this will only be knowable in hindsight, so I wouldn't sell based on this assumption. More likely, the market will consolidate around these levels and go on to make new highs in the near future.

long GILD, MSFT

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