It is shaping up to be a subdued start for the equity market on this last trading day of the third quarter, but how the equity market starts hasn't been as headline-worthy for some time now as how it ends -- and it has often ended with new record highs for one, or more than one, of the major indices.
The Russell 2000 and S&P Midcap 400 Index have joined the record-high club this week, along with the Dow Jones Transportation Average, as the so-called "reflation trade" has had a grip on the stock market and a choke-hold on the Treasury market.
For the time being, though, things are being held loosely.
The S&P futures are down two points, the Nasdaq 100 futures are up six points, and the Dow Jones Industrial Average futures are down 28 points. The 10-yr note is up three ticks and its yield has dipped one basis point to 2.30%. The U.S. Dollar Index, meanwhile, is down 0.1% at 93.00.
There isn't a lot of freshness in the major headlines this morning, so there isn't a real freshness in the conviction among buyers and sellers.
The topic of tax reform, and its chance of passage, continues to dominate the business media, yet nothing new, or scintillating, has been added to that conversation.
Corporate news has been sparse, but it has been sprinkled with some positive earnings news from the likes of KB Home (KBH) and Tyson Foods (TSN), and an announcement from Invesco (IVZ) that it is going to acquire Guggenheim Investments' ETF business for $1.2 billion in cash.
There was some fresh economic data this morning in the form of the Personal Income and Spending report for August, but when you dig down into that report, it wasn't entirely fresh. Actually, the key takeaway is that it was more of the same: weak income growth, disappointing spending growth, and continued "lowflation."
The details of the report included the following:
- A 0.2% increase in personal income (Briefing.com consensus 0.2%), which was repressed by no growth in the wages and salaries component
- A 0.1% increase in personal spending (Briefing.com consensus 0.1%), which was repressed by a 0.2% decline in spending on goods
- A 0.2% increase in the PCE Price Index (Briefing.com consensus 0.3%) and a 0.1% increase in the core PCE Price Index (Briefing.com consensus 0.2%)
- On a year-over-year basis, the PCE Price Index was unchanged at 1.4% while the core PCE price Index dipped to 1.3% from 1.4%, further complicating the inflation picture for the Federal Reserve
- Real disposable personal income decreased 0.1%, as did real PCE, which will be a drag on third quarter GDP growth forecasts
- The personal savings rate was unchanged at 3.6%
The Chicago PMI report for September (Briefing.com consensus 58.0; prior 58.9) will be released at 9:45 a.m. ET and will be followed by the final September reading for the University of Michigan Consumer Sentiment Index (Briefing.com consensus 95.4; prior 95.1) at 10:00 a.m. ET.
Those reports aren't expected to be market movers; nonetheless, the equity market will be on the move today in some way, shape, or form. The only question is whether it will be another headline-worthy, record-setting move.
It's not looking that way for the start, yet traders' pre-occupation is really on the finish.