Watching the stock market right now is like watching a bouncing ball. Yesterday was a prime example as the headline banter surrounding tariffs on steel and aluminum had the market down, up, down, and up again. When it was all said and done, though, there was no air left in the ball. The S&P 500 finished the day flat.
Today, there is a slight bounce in the market's step
The S&P 500 futures are up seven points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 33 points while the Dow Jones Industrial Average futures are up 22 points.
Wednesday's session ended with a sigh of relief so to speak as market participants reacted favorably to a remark from White House Press Secretary Sanders who said there could be potential carve outs for Mexico and Canada with any announcement on steel and aluminum tariffs.
That announcement could come today or tomorrow. It isn't entirely clear, yet there is a 3:30 p.m.ET meeting scheduled at the White House on the tariff issue.
The latest reports suggest Mexico and Canada would get a conditional reprieve from the tariffs and a more lasting reprieve if they work out a NAFTA agreement that is more favorable for the U.S. than the existing agreement.
This tariff issue, then, is both carrot and stick for those countries and this market. That's why one shouldn't necessarily expect the bouncing ball to stop bouncing, especially since China isn't expected to receive such concessions; and China has said it will retaliate with restrictive trade measures of its own if necessary.
It is a fluid situation with respect to trade headlines, and knowing that, conviction could be lacking in the market.
In other developments, the ECB left its key policy rates unchanged as expected, yet its directive dropped the declaration that the Governing Council stands ready to increase the size and duration of its asset purchase program if necessary.
Market participants know by now that Draghi and the ECB would do more if necessary, but removing the declaration today can be construed as a tacit signal that the ECB recognizes it is an unnecessary promise in light of the improved economic conditions in the eurozone.
To that end, he noted in his press conference that staff projections confirm broad-based growth and that growth is projected to expand in the near term at a somewhat faster pace than originally expected. The euro has moved up following the directive and Mr. Draghi's remarks. Currently, it is up 0.1% against the dollar at 1.2420.
Shares of Express Scripts (ESRX), meanwhile, are up 17% in pre-market trading following the news that Cigna (CI) has made a $67 billion cash-and-stock offer, including the assumption of debt, to acquire the pharmacy benefit manager. The deal terms translate into a 31% premium over yesterday's closing price.
That is the most noteworthy corporate news item this morning and it falls alongside earnings news from the likes of Costco (COST) and Kroger (KR).
On the economic front, China checked in with some solid trade results for February that were influenced by Lunar New Year dynamics. Import growth was a bit disappointing, up 6.3% year-over-year, but export growth soared 44.5%.
Closer to home, initial claims for the week ending March 3 increased by 21,000 to 231,000 (Briefing.com consensus 220,000). Continuing claims for the week ending February 24 decreased by 64,000 to 1.870 million.
This claims report will be glossed over for a few reasons: (1) it doesn't alter the market's perspective on the claims trend and (2) the Employment Situation Report for February will be released on Friday.