The futures market is pointing to a higher start today. The S&P futures are up 11 points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 35 points and the Dow Jones Industrial Average futures are up 129 points.
Now that you know that, you can compartmentalize it as only an opening indication. It means nothing beyond that, as yesterday's trading action demonstrated.
Recall the futures market was decidedly weak ahead of Monday's open. The major indices started on a downbeat note and then emerged from their funk in the afternoon session, erasing all of their losses and finishing on a decidedly upbeat note.
There wasn't a news catalyst for the rebound. It just happened, and, naturally, it was led by the information technology sector.
The rebound just started to feed on itself, because it wasn't looking like a real possibility for the first half of the day when the S&P 500 was skirting the 2700 level. Nothing can ever be taken for granted with this fickle market, however.
It shifts its trading perspective without explanation, thereby defying all of the news-driven explanations for why the market had been trading the way it was prior to the unexpected shift.
What are today's news-driven explanations for the positive bias evident in the futures market?
- It's a carryover from Monday's turnaround effort
- Angela Merkel appeased dissension in the ranks of Germany's governing coalition over a migration deal, thereby avoiding a government collapse
- The People's Bank of China has reportedly pledged to keep the exchange rate "stable at a reasonable and balanced level"
- Oil prices ($74.77, +$0.83, +1.1%) are pushing $75.00 per barrel, which is good for the energy sector (never mind that it's bad for consumers and the transportation companies)
- Corporate buyback activity hit a record in the second quarter and is expected to remain a persistent source of support for the market; and
- Amazon.com (AMZN) is up 0.6% in pre-market trading after announcing it is going to extend its Prime Day sale this year to 36 hours from 30 hours
We suppose one could cherry pick other headlines, too, because the nature of the business is to have an explanation for everything. In reality, the only sufficient explanation may be that there are more buyers than sellers, which can certainly make a difference in thinly-traded sessions like yesterday and today.
So, yes, today is looking good at the start, but whether things look the same by the closing bell remains the open-ended question. Today's closing bell, by the way, comes at 1:00 ET.
The market will be closed on Wednesday in observance of Independence Day and it will re-open Thursday for a full session, which will be filled with previews of Friday's Employment Situation Report for June, and, undoubtedly, lots of fickle explanations making sense of a fickle market.