To say the stock market has been distracted by political matters this week would be an understatement. This morning, however, it is finding some other distractions with a positive bent that have helped bend the futures trade into an upward curve.
Specifically, market participants are focusing on the jump in oil prices, the positive bias in European equity markets, and better-than-expected earnings results from the likes of Deere & Co. (DE), Applied Materials (AMAT), Salesforce.com (CRM), and Gap Inc. (GPS).
At the moment, the S&P futures are up seven points and are trading 0.3% above fair value.
The trading tone shifted around 3:00 a.m. ET when oil prices started to press higher. The price extension has been helped along by media reports indicating an OPEC panel is considering the possibility of not only extending its deal to cut oil production when it meets May 25, but also increasing the size of the production cut.
Saudi Arabia and Russia have already conceded that they are on board with a 9-month extension, so oil traders are enjoying the thought of the production cut itself possibly being upsized. That consideration has fueled a 1.5% gain in oil prices to $50.04 per barrel.
The strength in oil prices is expected to carry over to the energy sector, which should be a source of support for the broader market on this options expiration day.
The earnings news is also helping, more so than past sessions because the political headline drama has been dialed down.
Today's feature is a New York Times article detailing former FBI Director Comey's unease with his encounters with President Trump, yet the article doesn't shed any new light really on the president's alleged effort to get the FBI to close down its investigation of former National Security Adviser, Michael Flynn.
The president is departing today on a 9-day trip abroad, so there is also a budding sense that the stock market might get a measure of relief in the near term from the political drama unfolding here at home. One shouldn't be surprised if that assumption ultimately gets nipped in the bud. For now, though, things feel calmer.
There isn't any economic data of note today, so the stock market's performance will be the main attraction, assuming the U.S. Dollar Index doesn't upstage it.
The U.S. Dollar Index is down 0.6% to 97.34 with another thrust higher in in the euro (EUR/USD 1.1179, +0.8%) helping to drive it down as traders continue to find favor in the eurozone's improving growth and relative lack of political instability.
The dollar's performance will continue to be watched closely, but so, too, will the behavior of the S&P 500 around its 50-day simple moving average (2369.21).
The market tried yesterday but ultimately failed to reclaim the latter level as an area of support. That means it is still a point of technical resistance. It should be tested at the open, yet it will make traders feel better if the S&P 500 can close the week on top of that technical level of note instead of below it.