The stock market had a bad day on Thursday, but that was so yesterday -- or at least market bulls would like to think. Today, the tables have turned and the major indices are all indicated to open higher, supported by good earnings news and reports that Chinese officials are making a coordinated effort to lift investor sentiment.
Currently, the S&P 500 futures are up 9 points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 39 points and are trading 0.6% above fair value. The Dow Jones industrial Average futures are up 107 points and are trading 0.5% above fair value.
It almost goes without saying that how the market opens today won't be as important as how it closes.
Nevertheless, we said it and it will be incumbent upon market bulls to keep things on the up and up, lest there be another wave of selling pressure triggered by disappointment that the stock market can't seem to sustain a positive bias.
It's looking good now, as market participants have latched on to the better than expected earnings results from Procter & Gamble (PG), Honeywell (HON), Schlumberger (SLB), American Express (AXP), Intuitive Surgical (ISRG), and V.F. Corp (VFC) as a basis to try to repair some of Thursday's damage, which was concentrated on the growth stocks and facilitated by profit margin concerns surrounding the industrial sector.
Note that the stocks mentioned above are rooted in different sectors: consumer staples, industrials, energy, financials, health care, and consumer discretionary. That is an encouraging representation that should lend the broader market some needed support.
If there is any market that needs some support right now, though, it is China's Shanghai Composite. Entering today's trade, it was down 25.5% for the year. Exiting today's trade, it was down 22.9% for the year.
The Shanghai Composite had a good session, jumping 2.6% despite China reporting weaker than expected real GDP annualized growth of 6.5% for the third quarter, which was down from 6.7% in the second quarter.
That report corroborated the slowdown concerns surrounding the Chinese economy, and elements like deleveraging and tariff actions that have contributed to the slowdown.
Still, the deceleration in GDP growth was construed as a data point that will likely keep monetary and fiscal policy aligned with a supportive framework.
That view provided a brief selling reprieve for the Chinese market, which also enjoyed an official narrative that emphasized an aim of curtailing liquidity risk, speeding up merger approvals, and touting China's better-than-reported economic fundamentals.
European markets didn't ride China's coattails. Instead, they have ridden some disappointing earnings news from leading companies like Michelin and Daimler, and the anxious rancor surrounding Italy's budget plan for 2019, to a mixed outing..
Italy has been asked reportedly by EU officials to provide more information by Monday given the understanding that its budget calls for spending to increase 2.7% next year versus the maximum allowed growth of 0.1%. Italian bonds have remained jittery, evidenced by the 10-yr note yield of 3.74% hitting its highest level in four years. Six months ago, it stood at 1.72%.
The 10-yr Treasury yield is up one basis point this morning to 3.19% and isn't running too much interference for equity investors before today's open.