EmailBy most accounts, the holiday selling season got off to a strong start. The National Retail Federation estimates consumers spent $423 on average over the Black Friday weekend, which is a 6.3% increase versus last year. Notwithstanding that good news, the stock market is indicated to open lower.
The S&P futures are currently trading 0.5% below fair value. That follows a 1.3% gain for the cash market on Friday and a 4.0% increase over the last five trading sessions.
Reportedly, the view expressed Sunday by Senator Dick Durbin that there hasn't been much progress on the fiscal cliff over the last 10 days WHEN CONGRESS WAS GONE FOR ITS THANKSGIVING RECESS is one of the primary causes for the negative bias.
It's a silly rationale considering what Mr. Durbin said is a bit like saying school-aged kids didn't make much academic progress when they weren't in class during the Thanksgiving break. Gee, who would have thought?
Senator Durbin simply stated the obvious. Now, if the same can be said 10 days from now, then such an observation can be thought of as a more credible catalyst.
Another factor, which resonates a little more, is that EU finance ministers have yet to agree to a debt reduction plan for Greece. They remain stuck on the issue of a debt haircut and specifically on whether the official sector will be involved in any haircut should there be one. Even so, Greece is still expected to get another bailout tranche soon.
Political tempers are flaring in Egypt and that needs to be watched closely. Crude futures, though, are down at this juncture (-0.7% to $87.71), so the market doesn't appear to be showing any undue alarm just yet.
Separately, reports indicate that two-thirds of the votes cast in Spain's Catalonia region were for parties urging that a referendum be held on the issue of Catalan independence. Spain's IBEX is down 0.7%.
Spain has enough problems as it is. Calls for secession only complicate its fiscal turnaround effort. Anyway, this too needs to be watched, but it's not enough of a catalyst to be a serious drag today on the U.S. market.
As silly as it sounds, the only good explanation we can think of is that the market is short-term overbought after being short-term oversold, leaving it ripe for some profit-taking activity.
There isn't any major corporate news this morning and there aren't any economic releases of note.
The remainder of the week will bring a smattering of earnings reports and some insightful economic data in the form of the Durable Orders, Case-Shiller Home Price Index, Consumer Confidence, New Home Sales, Initial Claims, the Second Estimate for Q3 GDP, and the Personal Income and Spending reports.
