So far, the stock market this week has been pretty apathetic. It could care less that the UK's Brexit effort is a mess. It could care less that Boeing (BA) is dealing with a PR nightmare as multiple countries have grounded the 737 MAX. It could care less that earnings estimates for the first quarter are declining. And it could care less about global growth slowing down.
How does one measure the stock market's caring capacity? Look no further than the major indices.
The S&P 500 is up 1.8%; the Nasdaq Composite is up 2.5%; the Russell 2000 is up 1.8%; the S&P Midcap 400 is up 1.5%; and the Dow Jones Industrial Average, despite an 11% decline in its highest-priced component, is up 0.4%.
Every sector is up at least 1.2%; four sectors are up at least 2.0%; and the CBOE Volatility Index has plunged 14.2%.
The stock market is acting as if it doesn't have a care in the world, resigned it seems to let the world's major central banks do all of the worrying and provide all of the talk therapy through assurances that policy rates aren't going up anytime soon.
Now, that is something the stock market cares about. Low interest rates are a supportive element for risk assets, like stocks, which is why the stock market so far this week has afforded itself the luxury of not worrying.
It has followed a worry-free progression so far this morning, too.
The S&P futures are up six points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 22 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are up 65 points and are trading 0.3% above fair value.
There isn't any real news driver to explain the positive bias. Granted this morning's economic data had some soothing elements, yet it is worth noting that the gains in the futures market were pretty much achieved before the release of the data.
The Durable Goods Orders report for January showed a 0.4% increase in new orders (Briefing.com consensus -0.6%) and a 0.1% decline, excluding transportation (Briefing.com consensus +0.1%).
The key takeaway from the report is that it was constructive for the business investment outlook and Q1 GDP forecasts, evidenced by the 0.8% increase in orders for nondefense capital goods, excluding aircraft, and the 0.8% increase in shipments for that same metric.
The Producer Price Index for February, meanwhile, was nearly irrelevant given the soft Consumer Price Index for February seen yesterday. Be that as it may, it is worth noting that the index for final demand increased 0.1% (Briefing.com consensus +0.2%) while the index for final demand, excluding food and energy, also increased 0.1% (Briefing.com consensus +0.2%).
The key takeaway from the report is that year-over-year inflation trends tipped lower for the index for final demand (1.9% versus 2.0% for the months ending in January) and the index for final demand, excluding food and energy (2.5% versus 2.6% for the 12 months ending in January). That tipping action will keep the Fed tipped toward a patient mindset.
The latter isn't a new revelation for the stock market to digest nor for the Treasury market, which is a little weaker this morning (and was before the data came out).
That doesn't mean the stock market doesn't care. It does, because less is more when it comes to the persistence of low interest rates.