By and large, the corporate headlines this morning have provided little of note. The macro headlines, however, have given market participants plenty to mull over to begin the week -- and it looks like there is indeed some mulling that is taking place.
The S&P futures are down three points and are trading 0.1% below fair value.
That indication is notably staid given the tragic terrorist incident in London over the weekend, reports that several Arab nations, including Saudi Arabia, have cut diplomatic ties with Qatar due to its dealings with Iran, and the political uncertainty that continues to swirl in Washington over health care reform, tax reform, and the investigation into Russia's alleged interference with the U.S. election.
The aforementioned items are certainly headline drivers that the press have been driving, yet the stock market is pretty much doing what it has been doing for some time, which is to say that it is shutting itself off from the macro noise and continuing to operate in its own steady-state world of optimism.
The lackluster disposition of the futures market this morning, then, probably has more to do with a sense that some profit taking might be in order than it does with anything else.
Bear in mind that the S&P 500 has increased 3.5% over the last 11 trading sessions while the Nasdaq Composite has surged 4.9%.
There may very well be some fear about what's going on outside the stock market, but to this point, the fear of missing out on further gains is what has been going on inside the stock market.
It is part of a "pain trade" so to speak as market participants feel forced to participate on the upside knowing that the macro headlines are not producing the downside that one might have reasonably expected them to produce.
Speaking of production, first quarter productivity was revised up to unchanged (Briefing.com consensus -0.2%) from the 0.6% decline that was originally reported. Unit labor costs, meanwhile, were revised down to 2.2% (Briefing.com consensus 2.4%) from the 3.0% increase first reported due primarily to the upward revision to productivity.
The key takeaway from the report is that productivity is still weak despite the upward revision. From the first quarter of 2016 to the first quarter of 2017, productivity increased 1.2%.
Other data due today includes the ISM Services Report for May (Briefing.com 57.0; prior 57.5) and the Factory Orders Report for April (Briefing.com consensus -0.2%; prior 0.2%). Both reports will be released at 10:00 a.m. ET.
There was nothing disruptive in the Services PMI readings seen elsewhere. The Caixin Services PMI reading from China was actually better than expected, checking in at 52.8 versus 51.5 in April.
That report has been "observed" by market participants this morning, and like most other things, it has contributed generally to an observatory phase that has the S&P 500 on track for a sluggish start to begin the week, which will also feature the ECB meeting and testimony from former FBI Director Comey on Thursday.