The major indices are indicated to open higher this morning. There is no particular reason why, which is why most reports this morning are stretching to assign a reason for the positive bias.
There is optimism over the Jackson Hole Symposium; there is relief that President Trump in a speech yesterday before the American Legion didn't inflame his government shutdown threat or anything else; North Korea hasn't stirred the geopolitical pot; and there is the fallback excuse that the market remains hopeful that a tax reform deal will get done.
Basically, there is a blank line that says "insert reasonable-sounding excuse here" and that's what a lot of people are doing.
What they should be simply writing is that the stock market fluctuates and that there is more demand from buyers than sellers at the moment.
That's about the only good explanation that truly suffices considering the political reasoning for the stock market's moves this week has flip-flopped like a fish out of water.
Well, for the time being, the fish has made its way back into the water.
The S&P futures are up seven points, the Nasdaq 100 futures are up 22 points, and the Dow Jones Industrial Average futures are up 68 points. Those indications leave the major indices on track to open roughly 0.2% to 0.3% higher.
It won't be a major move, yet the unanswered question is whether that modest move will trigger some more short-covering activity that turns into something bigger on what is expected to be another thin day of trading.
The retail industry is expected to have its share of big movers. A number of companies reported their quarterly results and a number of companies, like Dollar Tree Stores (DLTR), Abercrombie & Fitch (ANF), Guess? (GES), Tiffany & Co. (TIF), Signet Jewelers (SIG), The Michaels Cos. (MIK), and Burlington Stores (BURL), blew past depressed earnings estimates.
The aforementioned stocks are all trading noticeably higher in pre-market action and will provide a dose of support for the broader market.
Presumably, the initial claims report will, too, only there hasn't been much change in the futures market since its release, primarily because there wasn't anything surprising about the report. That's not to say it wasn't good. On the contrary, it was good -- again!
Initial claims for the week ending August 19 increased by 2,000 to 234,000 (Briefing.com consensus 237,000) while continuing claims for the week ending August 12 were unchanged from the prior week at 1.954 million.
The report marked the 129th straight week initial claims have been below 300,000, which is reflective of a tight labor market.
The Existing Home Sales report for July (Briefing.com consensus 5.56 million; prior 5.52 million) will be released at 10:00 a.m. ET. Market participants will be interested to see if it ultimately goes the way of the New Home Sales report for July, which showed a sharp deceleration in sales activity from June.
On a related note, there will be a deceleration in yesterday's sales activity at the open. We've made our thoughts known why we think that is, but feel free to insert your reason here __________.