After an up start, it turned into a down day on Wednesday. The weakness was reportedly linked to concerns about possible trade wars developing if the U.S. takes a hard line in cutting the trade deficit with China.
The S&P 500 declined 0.6%, which left it sitting right on top of its 50-day simple moving average (2748).
The disappointing price action, which also featured continued weakness in the financial sector on the back of a flattening yield curve, kept many buyers sidelined.
Those buyers are trickling back in this morning, as the major indices are indicated to open slightly higher. The S&P futures, for instance, are up four points and are trading 0.1% above fair value.
The market's news drivers remain largely outside the stock market, which is to say there isn't much in the way of corporate news that is making a key headline difference.
A few items of note, though, include the news that Toys 'R Us is liquidating its U.S. business, which is bad news for Mattel (MAT) and Hasbro (HAS), and that Williams-Sonoma (WSM) and Dollar General (DG) delivered better than expected earnings reports and/or outlooks.
There is a heavy slate of economic data this morning. That slate catalyzed the futures market a bit as it effectively painted a picture of tight labor market conditions and an improving economy.
- Export prices were up 0.2% in February and up 0.2% excluding agriculture. Import prices were up 0.4% in February and up 0.5% excluding fuel.
- On a year-over-year basis, the price index for nonfuel imports is up 2.1%, which is the largest year-over-year advance since February 2012
- On a year-over-year basis, the price index for nonagricultural exports advanced 3.6%, which is the largest rise since December 2011
- Initial claims for the week ending March 10 decreased by 4,000 to 226,000, as expected. Continuing claims for the week ending March 3 increased by 4,000 to 1.879 million.
- Initial claims have held below 300,000 for 158 straight weeks and remain at levels that will continue to drive forecasts for solid increases in nonfarm payrolls
- The March Empire State Manufacturing Survey increased to 22.5 (Briefing.com consensus 15.0) from 13.1 in February
- The uptick was fed by increases in all component categories, with the exception of the Number of Employees Index, which slipped to 9.4 from 10.9
- The index for general business conditions six months ahead fell from 50.5 to 44.1, yet the latter level still connotes a healthy level of optimism about the outlook
- The Philadelphia Fed Index fell from 25.8 to 22.3 (Briefing.com consensus 23.7), driven mostly by pullbacks in the indexes for prices paid and prices received.
- The New Orders Index increased from 24.5 to 35.7
- The dividing line between expansion and contraction for the index is 0.0
The NAHB Housing Market Index for March (Briefing.com consensus 72.0; prior 72.0) will be released at 10:00 a.m. ET and Net Long-term TIC Flows for January will be published at 4:00 p.m. ET.
Once again, there is ample news for market participants to consider, yet it is the market's price action that is taking precedence as a focal point.
That price action has been fickle, which is why market participants have been lacking conviction and why the market itself is in a sideways chop.