There is every reason to think the major indices are going to start today on a higher note. The S&P futures are up 21 points, the Nasdaq 100 futures are up 53 points, and the Dow Jones Industrial Average futures are up 180 points, leaving them all trading roughly 0.8% above fair value.
Naturally, there is a headline driver for the positive disposition.
The long and short of things is that there is a measure of relief this morning that there hasn't been any major fallout from a missile strike on Syria Friday night that was led by the U.S., France, and Great Britain.
That strike targeted three facilities. It drew the praise of President Trump, who claimed "Mission Accomplished" in the wake of the strike, and it drew the ire of Russian President Putin, who warned that any additional strikes could invite chaos in global affairs.
The rhetoric between the two leaders might still be heated, yet the summary view of the market is that things seem likely to cool down now that the surgical strike on Syria's chemical weapon-making capabilities has been completed.
The oil market and the Treasury market have provided some trading/visual cues in that respect. Crude futures are down 1.2% to $66.60 per barrel and the 10-yr note yield is up four basis points to 2.86%, pressured by some safe-haven unwinding.
Concerns about trade wars took a backseat for a bit in the face of actual military action in Syria, but they haven't gone away. In fact, the president tweeted his dismay this morning about China and Russia playing a currency devaluation game while the U.S. keeps raising interest rates.
Interestingly, the Treasury Department did not label China a currency manipulator and the U.S. dollar has been in a downtrend against a basket of other major currencies since the start of 2017 as the Federal Reserve has raised interest rates.
The U.S. Dollar Index is weak again this morning, shedding 0.3% as the euro is picking up some strength.
The Retail Sales Report for March didn't alter the dollar's trajectory even though it was a bit better than expected.
Total retail sales increased 0.6% (Briefing.com consensus +0.4%) on the heels of a 0.1% decline in February. Excluding autos, retail sales jumped 0.2%, as expected, following a 0.2% increase in February.
Motor vehicle sales (+2.0%) led the overall advance along with heath and personal care stores (+1.4%) and nonstore retailers (+0.8%). The weak spots were Sporting goods (-1.8%), clothing and clothing accessories (-0.8%), and building materials (-0.6%).
The key takeaway from the report is that March stopped a streak of three consecutive monthly declines in retail sales, although it also demonstrates that consumers continue to show some restraint in discretionary spending.
Separately, the Empire Manufacturing Survey for April dropped to 15.8 (Briefing.com consensus 20.0) from 22.5 in March, as the New Orders Index fell 7.8 points to 9.0. The dividing line between expansion and contraction for this survey is 0.0, so the April reading connotes a slowdown (not a decline) in manufacturing growth in the New York Fed region.
Turning back to earnings news, Bank of America (BAC) followed course with JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC), and topped first quarter earnings expectations.
The question now is, will BAC follow the same course those stocks did on Friday? Each of those stocks coughed up early gains on Friday, and when they did, the broader market rolled over on the weight of disappointment that their "good" earnings news didn't turn the tide of sentiment.
This week will kick the first quarter earnings reporting into overdrive. According to FactSet, first quarter earnings are projected to increase 17.3%, which would be the highest earnings growth rate since the first quarter of 2011.