The futures for the major indices are up today following a down day for the cash market on Wednesday, which featured a lot of reported angst about the fate of tax reform and weakening economic indicators.
Specifically, the S&P futures are up eight points, the Nasdaq 100 futures are up 29 points, and the Dow Jones Industrial Average futures are up 82 points.
So, what changed to alter the market's mood? That is the question.
For the answer, let's just say a market that is unsure about what it should be influenced by more these days can be easily influenced by the prevailing tenor of the daily headlines.
On Wednesday, those prevailing headlines sounded a little worrisome. Today, they sound more upbeat -- or at least less worrisome.
- The House is set to vote on its tax bill today and that reportedly has fostered a sense of optimism in the market this morning, never mind that the House bill probably won't fly in the Senate in its current form
- Walmart (WMT), Cisco (CSCO), NetApp (NTAP), J.M. Smucker (SJM), and Restoration Hardware (RH) all shared encouraging earnings news. Their stocks are all indicated noticeably higher, which is lending support.
- The M&A wheel is spinning again, with Emerson (EMR) raising its bid to acquire Rockwell Automation (ROK) and Time, Inc. (TIME) reportedly warming to an acquisition by Meredith Corp. (MDP)
We can't help but wonder, though, if the futures indication is a head fake.
The typical pattern of late has featured weak opens that then give way to a steady buy-the-dip bid that makes things look better by the close. In that vein, then, we wouldn't put it past this fickle market to see a solid open today give way to selling on the strength that makes things look worse by the end of the day.
The market could of course squash that hunch since its daily swings are unpredictable, but the overarching point is not to read too much into matters when the headline mill surrounding tax reform is running full tilt.
There wasn't much tilt in this morning's economic reports, which is to say they won't alter any of the prevailing thoughts pertaining to underlying trends ahead of their release.
- Initial claims for the week ending November 11 jumped by 10,000 to 249,000 (Briefing.com consensus 234,000) while continuing claims for the week ending November 4 decreased by 44,000 to 1.86 million, hitting their lowest level since December 29, 1973
- Import prices increased 0.2% in October and were also up 0.2% excluding fuel
- On a year-over-year basis, nonfuel import prices are up 1.4%, which is the largest increase since the year ended March 2012
- Export prices were unchanged in October and down 0.3% excluding agriculture
- On a year-over-year basis, nonagricultural export prices are up 2.5% compared to a 3.0% increase for the 12 months ending September
- The Philadelphia Fed Index dipped to 22.7 in November (Briefing.com consensus 24.6) from 27.9 in October, reflecting a slight deceleration in manufacturing activity in the region. Even so, the index remained comfortably above 0.0 -- the dividing line between expansion and contraction -- for the 16th straight month.
The Industrial Production and Capacity Utilization report for October will be released at 9:15 a.m. ET.
In the meantime, the futures market continues to reflect the capacity to produce a higher start for the cash market.