Friday was one of those days where a loss was a win. Basically, the setup was there for a decent-sized pullback but it didn't happen.
The tech sector saw a big, downside reversal on Thursday following Facebook's (FB) impressive earnings report and then Amazon.com (AMZN) checked in with weaker than expected results after Thursday's close. AMZN dropped as much as 4.3% at one point on Friday and flirted with a breach of its 50-day moving average, yet despite AMZN's struggles, the broader market did not buckle to selling pressure.
AMZN would eventually finish Friday's session down 2.5% while the S&P 500 and Nasdaq Composite both only dipped 0.1%. The Dow Jones Industrial Average, meanwhile, moved up nearly 0.2% to yet another record high.
So, Friday will go down in the record books as a seemingly non-descript day given the minimal moves by the major indices, yet there was a good bit of bullish sentiment wrapped up in those minimal moves considering there was an ample excuse to knock the market down.
That show of resilience carried through a weekend in which President Trump turned out Reince Priebus as his Chief of Staff and welcomed in General John Kelly, the U.S. and South Korea conducted an anti-missile test following North Korea's ICBM missile test on Friday, China's manufacturing PMI report for July was weaker than expected, Russia ordered the U.S. to cut 755 diplomatic positions there, and Venezuela's leader cheered his successful outcome in a "sham election."
In other words, much of what happened outside the U.S. stock market wasn't all that positive, but as everyone knows by now, the stock market has carried on in the face of adverse, external developments as if it has a force field around it.
That force is with the bulls this morning, too. At the moment, the S&P futures are up three points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 13 points and are trading 0.3% above fair value, and the Dow Jones Industrial Average futures are up 62 points and are trading 0.3% above fair value.
The major indices, then, are all poised to start the session on a higher note.
Discovery Communication's (DISCA) offer to acquire Scripps Networks (SNI) for $14.6 billion, or $90 per share in cash and stock, has triggered a little "merger Monday" excitement that has been missing for awhile. Separately, there are reports that Softbank could soon make an offer for Charter Communications (CHTR).
There haven't been any "big" earnings reports this morning, yet everyone is aware that the biggest report of all, based on market cap, is on tap for Tuesday after the close. That's when Apple (AAPL) will report its results, and when just about everyone will likely look past any weakness (should there be any), citing the expectant iPhone 8 launch later this year, or will cheer any strength as an impressive show into the expectant iPhone 8 launch.
That doesn't mean AAPL can't trade lower on a sell-the-news response, just that it will likely be defended by the analyst community on any pullback.
The Chicago PMI report for July (Briefing.com consensus 60.0; prior 65.7) will be out at 9:45 a.m. ET today and will be followed by the Pending Home Sales report for June (Briefing.com consensus +1.1%; prior -0.8%) at 10:00 a.m. ET. The key report of the week, however, will be the July Employment Situation report on Friday.