The stock market dug itself a hole to start the week, as growth concerns sent each of the major indices down at least 2.0% on Monday. The widely-held technology stocks were the primary targets for sellers, yet they had ample company.
There is an effort being made this morning to dig out from the hole.
Currently, the S&P futures are up 10 points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 40 points and are trading 0.5% above fair value. The Dow Jones Industrial Average futures are up 46 points and are trading 2% above fair value.
Dow component Home Depot (HD) is garnering some attribution for the positive bias. The home improvement retailer put up some impressive third quarter results, which featured a 5.4% increase in U.S. comparable-store sales, and raised its FY18 revenue, EPS, and comparable-store sales guidance.
Shares of HD are up 0.9% in pre-market action. Advance Auto Parts (AAP) is another retailer that topped third quarter estimates and raised its FY18 guidance. Its stock is indicated 5.2% higher.
Good vibes from the retail space, then, are making up somewhat for the bad vibes that surrounded the information technology, financial, and energy sectors on Monday.
Another element lending some support today is a report that Treasury Secretary Mnuchin and Chinese Vice Premier Liu had a recent phone conversation geared toward trying to ease the trade tension between the U.S. and China heading into the G20 meeting at the end of the month.
That news, however, should be interpreted with a grain of salt for several reasons: (1) it isn't a surprise that back-channel conversations were happening (2) it has been previously reported that the two sides would be aiming to lower the temperature on their trade dispute going into the meeting and (3) everyone should be aware by now that words have typically spoken louder than action in the bid to resolve the trade disagreement.
Separately, we would hasten to point out that there are separate reports suggesting President Trump will be meeting with his advisors today to discuss whether to impose a 25% tariff on autos and there is a tweet from the president this morning that is critical of the tariffs France places on wine imports.
In other words, the kumbaya trade moment everyone is hoping for hasn't arrived yet.
It doesn't appear either that a bottom has arrived yet for Apple (AAPL). It is down 1.1% in pre-market trading after Goldman Sachs cut its earnings estimates and lowered its price target to $209 from $222 following Monday's warning from supplier Lumentum (LITE).
Apple's weakness remains a weight on the broader market. In the same vein, so does the continued weakness in oil prices ($59.05, -$0.89, -1.5%), which have fallen for 11 straight sessions. That weakness is pressuring the energy sector, as it is leading to questions about earnings prospects.
The latter has been at the heart of the matter for the stock market's recent struggles. Earnings prospects in general are being called into question as interest rates have risen, the dollar has strengthened, input costs have increased, and global economies have slowed.