There was no mistaking the stock market's bias on Thursday. It was bullish at the start and bullish at the close. The highlight of it all was that the S&P 500 and Dow Jones Industrial Average set new record highs.
It was an orderly rally on Thursday, which is to say there wasn't panic buying. There was a steady bid, however, that conveyed confidence in the trend and a tacit feeling of not wanting to miss out on further gains.
The volume was heavier than average at the NYSE and Nasdaq, but it wasn't extremely heavy. That will likely change today given that it is a quarterly options expiration day.
At the moment, the major indices look poised for a modestly higher start when the opening bell rings.
The S&P futures are up four points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 15 points and the Dow Jones Industrial Average futures are up 53 points.
The futures had been signalling an even stronger move to the upside, yet they started fading about 4:00 a.m. ET, which is when the eurozone released a disappointing preliminary manufacturing PMI report for September.
That PMI reading checked in at 53.3 versus a prior reading of 54.6. That disappointing reading didn't derail the equity markets in Europe, though, as it was likely seen as a basis for the ECB to be very deliberate with policy actions that remove accommodation.
The euro is off a bit against the dollar, but the DAX, the CAC 40, and the FTSE 100 are up between 0.4% and 1.0%. Those gains came on the heels of even better showings from markets in Asia. The Nikkei added 0.8% while the Hang Seng and Shanghai Composite shot up 1.7% and 2.5%, respectively.
The strength in the Shanghai, which rose 4.3% this week, was attributed to the thinking that the government is going to provide support tools that will help offset any impact from the tariffs. We'll see, but it was a strikingly good week for the stock market there, which has not acted well in 2018 amid the tariff action and a slowdown in economic activity.
There aren't any major economic releases of note out of the U.S. today, yet there are some corporate stories of note.
Walmart (WMT) has reportedly warned that it might have to raise prices because of the tariffs and Micron (MU), which posted better than expected fourth quarter earnings, issued disappointing guidance for its fiscal first quarter, citing in part gross margin pressures linked to the tariff actions.
Shares of WMT are down 0.5% while shares of MU are down 3.9%. Conversely, shares of Texas Instruments (TXN) and Dow component McDonald's (MCD) are up 2.1% and 0.6%, respectively, after both blue chip companies announced sizable dividend increases.
There is some curve-flattening action early on in the Treasury market. The 2-yr yield is up two basis points to 2.82% while the 10-yr yield is unchanged at 3.08%. That could slow some of the upward momentum driving the financial sector, which is up 2.6% for the week entering today's trading.
The S&P 500 is up "only" 0.9% for the week, bringing its year-to-date gain to 9.6% (before dividends) and conveying a message that trade matters thus far have not derailed trading matters that appear to be rooted in the optimism over strong economic and earnings growth.