You might not know it, but today is a big day for the equity market. It is a big day because the largest company by market capitalization -- Apple (AAPL) -- will be reporting its quarterly results after the close.
Apple is a Dow component and it is also a member of the S&P 500 and the Nasdaq 100. In other words, Apple is a market-moving stock, and its influence has been on full display this year.
AAPL has risen an astounding 26.6% since the end of 2016. That's a massive move for any stock in roughly four months' time, yet it's monumental for a stock whose market cap is now pushing $800 billion.
With that move, AAPL has hit an all-time high and it currently sits 22% above its 200-day simple moving average as traders and investors alike have been riding its momentum and the premise that it is poised to benefit from a huge replacement cycle when it releases the iPhone 8 later this year.
The latter release is why a number of pundits have suggested tonight's report won't matter all that much, even if it proves to be disappointing. In short, there is a lot of sales and profit hope on the horizon. We can see the logic behind such thinking, only we remain inclined to think that AAPL will still be hugely important for the market.
The twist is that the report itself won't be as important for the market as the performance of Apple's stock in the wake of the report will be.
Does it fall victim to the quintessential sell-the-news response or does the stock just keep on chugging along? The answer is certain to have some broad market influence.
We don't often spend as much time in this space discussing a single company, yet Apple is a big company with big influence because it is so widely held.
We have a sense the market appreciates that point, because there is little change in the index futures this morning despite a large batch of earnings reports since yesterday's close that has featured mostly upside earnings surprises and reassuring guidance from the likes of CVS Health (CVS), Eaton (ETN), Merck (MRK), Pfizer (PFE), BP (BP), Coach (COH), and Aetna (AET).
The S&P futures are down fractionally at the moment, yet they are trading 0.1% above fair value, which would translate into a slightly higher open for the cash market if that indication holds.
Separately, the Treasury market has remained weak as some of the risk premium continues to drop out of that market ahead of Sunday's final vote in the French presidential election, which is expected to go the way of centrist -- and pro-EU -- candidate Emmanuel Macron.
A Bloomberg report discussing how hedge funds and large speculators are now bullish on Treasuries across the curve, based on CFTC data, hasn't been lost on traders either given the contrarian implications of that report.
The resilience of the stock market, however, along with the robustness of first quarter earnings growth and the understanding that the tax reform ball is being moved forward, has also weighed on the Treasury market, which has seen the yield on the 10-yr note climb 17 basis points to 2.34% over the last 10 trading sessions.
That's another big development that will continue to be closely watched in addition to the auto/truck sales data for April that will be released throughout the day.
The big, big attraction, though, is how Apple trades after its report. That won't be known in full until tomorrow, which is why the shape of things to come today is a bit obtuse at the moment.