It's hard to tell if the market is just tired after a massive rally, checked out in front of an extended holiday weekend, or genuinely bothered by concerns regarding the economic outlook.
We say this knowing that the market closed lower yesterday despite receiving better-than-expected economic news out of China and better-than-expected earnings news from a host of U.S.-based companies.
We say this knowing that flash manufacturing PMI reports for April from the eurozone today were disappointing and knowing that a host of U.S-based companies topped first quarter EPS expectations.
We say this knowing that the futures for the major indices are little changed and signaling a relatively flattish open.
The lack of conviction is sure to be attributed to some "trepidation" in front of Attorney General Barr's press conference at 9:30 a.m. ET today to discuss the release of what will reportedly be a lightly redacted Mueller Report sometime after 11:00 ET.
That's really just a convenient excuse, though, knowing that the market has all but turned a blind eye to this point to the Mueller investigation.
It should make for some interesting news, but it's unlikely to be a material trading catalyst.
One might have expected earnings results from American Express (AXP), Travelers (TRV), Schlumberger (SLB), Honeywell (HON), Las Vegas Sands (LVS), Alcoa (AA), SunTrust Banks (STI), Danaher (DHR), and PPG Industries (PPG) to be a material trading catalyst, but they have not been for the broader market.
They have stirred some company-specific responses, but they haven't moved the needle much for the S&P 500, which has been trolling the 2900 level without a lot of conviction.
This morning's economic data out of the U.S., though, helped move the needle a bit.
- Total retail sales in March increased 1.6% (Briefing.com consensus +0.9%). Excluding autos, they were up 1.2% (Briefing.com consensus +0.7%).
- The key takeaway from the report is that the sales strength was broad-based with nice gains seen across discretionary spending categories. This data will compute well in the calculation of the goods component for personal consumption expenditures in the Q1 GDP report.
- Initial claims for the week ending April 13 decreased by 5,000 to 192,000 (Briefing.com consensus 208,000), which is the lowest level since September 6, 1969. Continuing claims for the week ending April 6 decreased by 63,000 to 1.653 million.
- The key takeaway from the initial claims data (a leading indicator) remains unchanged: it shows employers are reluctant to let go of employees, either because they can't find qualified workers or because they see demand being strong enough to justify the size of their existing work force.
- The Philadelphia Fed Index dipped to 8.5 in April (Briefing.com consensus 11.0) from 13.7 in March. The New Orders Index, however, surged to 15.7 from 1.9.
- The key takeaway from the report was found in the diffusion index for future general activity, which fell to its lowest level (19.1) since February 2016, suggesting there is some fading optimism in future business activity.
The retail sales number was a nice sight to behold and another data point, along with the drop in initial claims, that will likely reduce expectations for a rate cut from the Fed in the near future since both suggest the economy isn't going to contract in the near future.
The stock market, nevertheless, could still contract given the run it has been on and the lack of any meaningful pullback during that run. Right now, it seems to be jogging in place, most likely because it is tired and checked out in front of the long weekend.
Markets will be closed tomorrow in observance of Good Friday.