Media reports continue to suggest the tax reform effort is running into resistance that could threaten its ultimate passage. The stock market, however, isn't getting too caught up in those reports as it is indicated to open today's session modestly higher.
The S&P futures are up five points, the Nasdaq 100 futures are up 16 points, and the Dow Jones Industrial Average futures are up 55 points.
That positive disposition took root overnight, with Asian markets trading higher, and it has been maintained this morning amid a pickup in activity following the Columbus Day holiday.
Some supportive influences have included American Airlines (AAL) and United Airlines (UAL) raising their third quarter guidance, Goldman Sachs raising its price target for Caterpillar (CAT) to $158 from $143, Walmart (WMT) reiterating its fiscal 2018 adjusted EPS guidance, and Honeywell (HON) raising the low end of its fiscal 2017 EPS guidance in conjunction with an announcement that it is going to spin off its Homes and Global Distribution and Transportation Systems businesses into two stand-alone, publicly-traded companies.
A 1.3% jump in oil prices to $50.23 per barrel, which has been aided by a weaker dollar, also seems to be helping as that gain is expected to provide a boost for the energy sector.
The dollar's weakness has been driven mostly by strength in the euro, which is an offshoot of ECB member Lautenschlaeger's remark that the ECB should pare its asset purchases at the beginning of next year.
Overall, there is a tone of consistency in the futures trade, which is to say market participants have yet to identify a compelling reason to give up on stocks despite plenty of talk that they are overextended on a short-term basis.
Some pundits think that leaning could leave the market vulnerable to a sell-the-news response during the third quarter earnings reporting period, which will pick up in earnest later this week.
There is certainly a lot of good news priced into the stock market already, evidenced by the fact that it has continued to go up as earnings growth estimates for the third quarter have continued to come down.
To wit, the estimated third quarter earnings growth rate for the S&P 500 stood at 7.5% on June 30, according to FactSet. Today, it stands at 2.5%. Despite the downward revision, the S&P 500 has increased 5.0% since June 30.
The media reports might suggest there is a real risk of a tax reform plan not coming to fruition, yet the stock market is clearly still hopeful that one will.