The S&P 500 will have to advance nearly 2.5% today to avoid a losing month.  That is not likely to happen, but from the look of the futures market this morning, it will go down fighting.

Currently, the S&P futures are 0.8% above fair value.  The catalysts for the positive disposition include news that industrial production picked up in Japan in April and is expected to accelerate further, and word that eurozone officials are working out details of a new loan package for Greece.

Foreign markets got a nice pop on those developments, with most major markets gaining between 1.0% and 2.0%.  The favorable sentiment is carrying over to the U.S., which means we are going to be stuck with the "risk-on" dialect today.  So be it.

What we are really seeing is a relief bid -- relief that Japan seems to be getting going again after the March tsunami and relief that Greece isn't going to default on its debt in the near future. 

The supposed fix for Greece is raising all kinds of issues in the realm of moral hazard.

No matter the line of attack, it is clear that equity markets are in favor of what we'll call the Grecian Formula approach, which is one where policymakers prefer to keep covering up the true look of things instead of allowing them to follow their natural course.

The Greek situation has not been solved and Japan certainly has its ongoing problems, but going from a worst-case scenario to what sounds like a less bad scenario qualifies as a positive in trading circles.

That mentality will push things along at the opening bell, but new tests of sentiment will soon be presented in the form of the Chicago PMI (Briefing.com consensus 62.5; prior 67.6) and Consumer Confidence (Briefing.com consensus 66.3; prior 65.4) reports for May at 9:45 a.m. ET and 10:00 a.m. ET, respectively.

It will be interesting to see if bad news is bad news; if bad news is good news; or if good news is good news.  The fourth dynamic of good news being bad news isn't contemplated here, because neither of these reports is expected to create a presumption the Fed will back off its accommodative policy sooner rather than later (it is this line of thinking that would see good news interpreted to be bad news).

If anything, bad economic news will invite some knee-jerk reactions.  The first move down might look troubling, but support is apt to be found on the notion that bad economic news simply means the Fed's easy monetary policy will remain intact longer.

These policy/economic perspectives will be put to the test this week, which also features the ISM Index tomorrow, weekly initial claims on Thursday, and the May employment report on Friday.

Separately, there is a potential source of market upset lurking in the shadows. 

News reports indicate the House will take a straight, up-or-down vote tonight on raising the debt limit.  It is not expected to be approved at this juncture; nonetheless, if there is a significant gap between the up and down votes, it has potential to fuel concern that political divides are too wide to reach an agreement by August 2.

For now, though, all parties can be agreed that the U.S. equity market is poised to begin today's session on a positive note.

--Patrick J. O'Hare, Briefing.com

Patrick J. O'Hare is the Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial please email researchsales@briefing.com.