The equity market looks poised to reclaim a chunk of last week's loss--which marked the S&P 500's worst one-week drop since March--at Monday's opening bell as the S&P 500 futures currently trade 15 points, or 0.6%, above fair value. Similarly, the Nasdaq futures are currently trading 36 points, or 0.6%, above fair value.
A war of words broke out between the U.S. and North Korea last week, prompting investors to take some money off the table following the stock market's most recent run to new record highs. The geopolitical tension eased a bit over the weekend, however, with U.S. Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson saying that the U.S. is still trying to achieve a diplomatic solution in regards to North Korea's nuclear program.
Unsurprisingly, safe-haven assets are trading lower amid this morning's risk-on sentiment; gold is down 0.4% at $1,288.82/ozt, the Japanese yen has dropped 0.4% against the U.S. dollar to 109.61, and the benchmark 10-yr yield, which moves inversely to the price of the 10-yr U.S. Treasury note, is higher by two basis points at 2.22%.
In addition, the CBOE Volatility Index (VIX 13.20, -2.31) is down 14.9% this morning after spiking to multi-month highs at the tail end of last week.
Global markets have largely moved in tandem with Wall Street throughout the geopolitical uncertainty, dropping with U.S. equities last week and trading mostly in the green with them this morning.
In China, today's batch of economic data came in below expectations with July Retail Sales and July Industrial Production showing year-over-year increases of 10.4% (consensus 10.8%) and 6.4% (consensus 7.2%), respectively. However, the Shanghai Composite still fished higher, climbing 0.9%.
Today's U.S. economic calendar is blank, but investors will receive several notable economic reports throughout the week, including July Retail Sales (Briefing.com consensus 0.3%) on Tuesday, July Housing Starts (Briefing.com consensus 1.217 million) on Wednesday, and July Industrial Production (Briefing.com consensus 0.3%) and Capacity Utilization (Briefing.com consensus 76.7%) on Thursday.
Also of note, the minutes from the July 25-26 FOMC meeting will be released on Wednesday afternoon at 14:00 ET.