For the most part, it has been a pretty uneventful week up to this point and the market action has reflected as much. The S&P 500 is down just 0.4% after gaining 4.6% last week.
The S&P futures, however, are trading 0.5% above fair value this morning. If the trend holds, the S&P 500 price index could very well be sporting a new five-year high by the close.
A trade balance report out of China, which featured a stronger-than-expected 14% increase in exports, has provided a spark for global markets.
Word from Nokia (NOK) that it sees fourth quarter results exceeding its prior guidance and news that Ford (F) is doubling its quarterly dividend to $0.10 per share has also lent a measure of support, offsetting an FY13 earnings warning from Tiffany & Co. (TIF) and a Morgan Stanley downgrade of Microsoft (MSFT) to Equal Weight from Overweight.
The ECB and Bank of England both held policy meetings today. The former announced that it is leaving its benchmark rate unchanged at 0.75% while the latter said it was holding its key lending rate steady at 0.50% and its asset purchase plan at GBP 375 bln.
Both of these decisions were expected. Hence, their impact on the market has been limited.
Similarly, the initial claims data for the week ending January 5 didn't shock anyone. Claims increased 4,000 from a downwardly revised 367,000 to 371,000. While slightly above the Briefing.com consensus estimate of 364,000, the latest claims reading fits snugly in the range of 350,000 to 400,000 where its has remained bounded for the better part of the last year.
The takeaway is that it is largely more of the same in the labor market, supporting an early expectation that nonfarm payroll growth in January will likely be near the 153,000 average gain for the last twelve months.
Continuing claims for the week ending December 29 declined by 127,000 to 3.109 mln (Briefing.com consensus 3.200 mln). That is the lowest level for continuing claims since July 2008.
The futures market barely moved after the release.
Look for cyclical sectors to pace the early advance. Industrial metals are trading higher along with oil prices (+$1.05 to $94.15/bbl), bolstered by China's encouraging trade data. Bonds are on the defensive.
Eventually, the market's focus will shift to today's speeches from Kansas City Fed President George (1:10 p.m. ET) and St. Louis Fed President Bullard (2:00 p.m. ET). Both will be providing their economic insight and both have the potential to move the market considering they are voting members on the FOMC this year.