Today's early buying interest is accruing in Seattle where Amazon.com (AMZN) is located, as opportunistic shoppers are taking advantage of PrimeDay sales. Buyers on Wall Street, however, aren't taking advantage of much of anything. The S&P futures are down two points and are trading 0.1% below fair value while the Nasdaq 100 futures are down eight points and are trading 0.2% below fair value.
The futures indication has the cash market on course for a modestly lower start. After that, there's no telling where the market will go today and why exactly it will go there.
The stock market has had a rather fickle demeanor of late, trading up one day and down the next, or just trading mixed with one index doing well and another not doing well. Monday was a case in point. The Nasdaq Composite jumped 0.4% while the Russell 2000 slumped 0.5%; meanwhile, the Dow and S&P 500 were little changed.
Today, the S&P 500 will be starting at 2427.43, which is where it roughly ended on June 6.
That can be labeled a consolidation trade and it is a dynamic that has been accented by a rotation among sectors more so than it has been by a rotation out of the stock market altogether.
It has been a fairly sturdy performance against a backdrop of long-term rates moving higher and a Federal Reserve that has sounded inclined to keep removing policy accommodation despite inflation not picking up.
San Francisco Fed President Williams (not an FOMC voter) carried that mantel in a speech last night in which he said he still thinks it is reasonable to expect one more rate hike this year, that inflation's recent weakness is likely to be transitory, and that it is his own view that the Fed should start paring its balance sheet in the next few months.
Fed Governor Brainard (an FOMC voter) and Minneapolis Fed President Kashkari (an FOMC voter), who was not in favor of last month's rate hike, will be speaking at 12:30 p.m. ET and 1:20 p.m. ET today.
Market participants are probably more caught up today, however, with the understanding that Fed Chair Yellen is going to deliver her semiannual monetary policy report to the House Financial Services Committee on Wednesday at 10:00 a.m. ET. Her remarks and her answers in the Q&A portion of her testimony will be the more convincing guide for the capital markets.
Accordingly, there is a bit of a wait-and-see mentality this morning ahead of the Fed Chair's testimony that has kept the futures market in check. On a related note, press reports indicate President Trump plans to nominate Randal Quarles, an investment manager and former Bush administration Treasury Department official, as Fed vice chair of supervision. The nomination would not be a surprise.
Other notable news items this morning include PepsiCo (PEP) topping second quarter earnings expectations and slightly raising its full-year guidance, Morgan Stanley downgrading Snap (SNAP) to Equal Weight from Overweight, J.C. Penney (JCP) announcing its CFO is leaving to pursue another opportunity, oil prices falling 1.0% to $43.97 per barrel, and the NFIB Small Business Optimism Index slipping to 103.6 in June from 104.5 in May.
The Wholesale Inventories (Briefing.com consensus +0.3%; prior -0.5%) and JOLTS - Job Openings reports for May will be released at 10:00 a.m. ET. Neither report is expected to move the market, which has moved in fits and starts over the last month or so without moving much at all.