The stock market has been on a tear of late, undaunted by anything negative and cheered by anything that is positive -- or at least no more negative than before. Over the past three sessions, the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average have advanced 3.4%, 2.6%, and 2.5%, respectively.
The early take is that they're coming back for more when the opening bell rings.
The S&P futures are up four points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 10 points and the Dow Jones Industrial Average futures are up 67 points.
If there is anything slowing down the market this morning, it is a sense that they have run too far, too fast, in a race that has its hurdles.
We're talking about protectionist trade actions, increased transportation and commodity costs, a strengthening dollar, rising policy rates in the U.S., and political rancor within, and among, allied countries to name a few.
The immediate hurdle ahead, however, is a technical one.
The S&P 500 is in the upper reaches of a trading range (2600-2800) it has been locked in since early February. An effort to break above 2800 was beaten back in March and again in June. Accordingly, participants will be keeping a close watch on how the market responds with another test of that upper bound very much within its reach.
This morning, it doesn't have a lot of corporate news to latch onto as a bullish driver.
Better than expected earnings results from PepsiCo (PEP), however, and a bid in Tesla (TSLA), which is planning a factory in China, according to Bloomberg sources, that could produce as many as 500,000 vehicles per year, have kept a measure of the market's bullish energy intact.
The big news item overnight was President Trump nominating Brett Kavanaugh to the Supreme Court. Mr. Kavanaugh was considered a frontrunner and reportedly has a pro-business bent. That understanding doesn't hurt the market, yet the lack of surprise isn't necessarily helping it much either.
Elsewhere, China's CPI data for June was in-line with estimates, although its PPI data was a bit hotter than expected. Neither report caused any real upset. China's Shanghai Composite increased 0.4%.
Staying abroad, Germany's ZEW Economic Sentiment for July fell to -24.7 from -16.1, marking a six-year low. Norway, meanwhile, is being confronted with a strike among oil rig workers that is adding to the mix of supply issues that have been generally supportive to oil prices of late.
Currently, Brent crude prices are up 1.1% to $78.94/bbl while WTI crude prices are up 0.4% to $74.17/bbl.
The uptick in oil prices is expected to lend support to the energy sector, which made a healthy move (+1.5%) on Monday. It was the financial sector, though, that made the healthiest move (+2.3%), and it is the financial sector that will be watched most closely to see if that healthy condition can persist and potentially drive a breakout above 2800.