EmailA new week is dawning amid some familiar story lines and some new ones that have the broader market going mostly nowhere. This is a big week, too, so it will be interesting to see how things look when the sun sets on Friday.
For now, today's open is on track to be slightly weaker even though Hasbro (HAS) impressed with better-than-expected earnings results and LifePoint Hospitals (LPNT) agreed to be acquired by private equity firm Apollo Global Management for $65.00 per share in cash, which is a handsome 36% premium to its closing price on Friday.
This morning's hesitation has been attributed to the familiar clutch of trade uncertainty, as well as a seeming encroachment on the Federal Reserve's independence by the president that stalled the market on Friday.
There is ample attention also being paid to a provocative tweet from President Trump who warned Iran to "never, ever threaten the United States again or you will suffer consequences the likes of which few throughout history have ever suffered before."
This tweet came on the heels of Iranian President Rouhani warning the U.S. about forging ahead with policies that will hurt Iranian interests, saying that "America should know that peace with Iran is the mother of all peace, and war with Iran is the mother of all wars."
Those counter punches have been good for a 1.3% pop in oil prices ($69.14, +$0.88), which is actually pretty modest when one stops to think about just what's at stake in a military altercation between the U.S. and Iran.
Basically, a 1.3% gain in oil prices suggests traders are acknowledging the hyperbole but are refraining from taking things parabolic, cognizant that a2 + b2 doesn't equal c2 in a war of words.
Nevertheless, throw this latest bit of Twitter diplomacy into the mix as something market participants need to account for as a potential spoiler of the good earnings news.
It has been a distraction this morning that has kept the futures market under wraps.
Currently, the S&P futures are flat and are trading less than 0.1% below fair value. The Nasdaq 100 futures are down 15 points and the Dow Jones Industrial Average futures are up two points.
The futures market is also showing some reserve, however, because market participants are aware the week ahead is going to produce a litany of eventful news.
There will be earnings reports from more than 170 S&P 500 companies, including reports from Alphabet (GOOG) after today's close and Facebook (FB) and Amazon.com (AMZN later in the week; there is a trade-related meeting on Wednesday between European Commission President Juncker and President Trump; there is an ECB meeting on Thursday; and the Advance Q2 GDP Report will be released on Friday.
Tucked in between it all will be the ongoing uncertainty about trade matters, which was fueled over the weekend by Treasury Secretary Mnuchin, who said he wouldn't minimize the possibility of President Trump following through on the threat to implement tariffs on all Chinese goods imported to the United States.
So, sit back, but don't necessarily relax. There is some tension on the line as the S&P 500 walks a key support line at 2800.
