Friday is here and the finish line is in sight. That is a good thing because it has been an exhausting week with the wobbly price action and the steady flow of political headlines related to trade and personnel changes at the White House.
The S&P 500 enters today down 1.4% for the week, yet it feels worse than that considering the materials sector is down 3.3%, the financial sector is down 2.6%, the industrials sector is down 2.5%, the consumer staples sector is down 2.1%, and the energy sector is down 1.9%.
The information technology sector is down 0.9%, which means it has exhibited relative strength, yet it has been subjected to selling interest.
It's difficult to say if the weakness this week is a function of taking profits after a sharp rebound effort or whether it is a genuine reflection of concerns about trade wars leading to a slowdown in global economic growth.
The flattening yield curve, the weakening dollar, and the underperformance of the cyclical sectors, as well as the consumer staples sector, which has extensive international exposure, lends some credence to the idea that trade war concerns are affecting investor sentiment.
Nevertheless, this bull market has shown a propensity to take the bad with the good and ultimately put more stock (no pun intended) in the good.
What's good right now is that interest rates are still relatively low... and what's really good right now is that earnings growth is still strong. That combination has been a security blanket for the market whenever it has been tossed a wet blanket in the form of some nettlesome headline that upsets the bull market's steady demeanor.
Alas, things have felt unsteady this week, so market participants have found a reason to take some money off the table.
Today's table, however, has been set for a slightly higher open. The S&P futures are up three points and are trading 0.3% above fair value.
Notably, the S&P 500 closed Thursday just under its 50-day simple moving average (2748-2749), so the opening indication suggests there is a good chance it will reclaim a spot above that closely-watched technical level. Can it hold that level, though? That is the question on the mind of many traders.
Tiffany & Co. (TIF) and Broadcom (AVGO) are trading down after their respective earnings reports and outlooks. Qualcomm (QCOM), meanwhile, is trading up following reports former chairman Paul Jacobs is trying to arrange funding to buy the company.
These companies will qualify as story stocks, yet they aren't doing a lot to move the broader market one way or the other.
Similarly, the February Housing Starts and Building Permits Report isn't either.
Starts ran at a seasonally adjusted annual rate of 1.236 million units (Briefing.com consensus 1.283 million) and permits were at a seasonally adjusted annual rate of 1.298 million (Briefing.com consensus 1.330 million). Both weaker than expected, yet some underlying detail in the report helped offset the headline misses.
Specifically, single-family starts, where the supply is most needed, increased 2.9% to 902,000 with gains in the South (+4.1%) and the West (+8.8%) -- the country's two largest regions -- driving the increase.
Also, the number of units under construction edged higher from January to 1.115 million, leaving the first quarter average slightly above the fourth quarter average. That will qualify, then, as a positive input in Q1 GDP growth estimates.
Another item worth mentioning (certainly in the context of this week's developments) is that there are press reports suggesting National Security Adviser McMaster will soon be removed from his post. The White House, however, pushed back on those reports and said there are no changes at the National Security Council.
That decision could be subject to change of course, but things are what they are for now -- and what they are from a broad market standpoint is questionable.