Tuesday didn't produce much for the major indices, yet it produced just enough for the S&P 500, Nasdaq Composite, and Russell 2000 to close the session at new record highs. The Russell 2000 did so by the skin of its teeth, gaining 0.02 points.
By and large, Tuesday was a day of consolidation for the major indices and it would be little surprise if today is more of the same.
The futures market certainly isn't throwing off any strong, directional indication. Currently, the S&P futures are flat and are trading in-line with fair value. The Nasdaq 100 futures are up six points and the Dow Jones Industrial Average futures are down nine points.
The relevance of those flattish readings isn't in the understanding that they reflect a lack of buying interest. Rather, the relevance is in the understanding that they reflect a lack of selling interest.
Market participants aren't searching eagerly for the exit sign, because the tale of the tape suggests to them that the party isn't over yet.
Sure, it's possible that some month-end activity could weigh on the major indices a bit, along with some profit-taking in front of the three-day weekend, yet it's fair to say this market still has an upside bias.
There hasn't been a news driver recently to upset matters and there aren't any this morning either.
Any disruptions in the trading universe are mostly company specific, like American Eagle Outfitters (AEO) and Dick's Sporting Goods (DKS), which disappointed with earnings guidance. Conversely, Hewlett-Packard Enterprise (HPE) and Express (EXPR) pleased investors with their results and guidance.
The second estimate for Q2 GDP, meanwhile, checked in at 4.2% (Briefing.com consensus 4.0%) versus the advance estimate of 4.1%. The Q2 GDP Deflator also pushed up to 3.2% (Briefing.com consensus 3.0%) from the advance estimate of 3.0%.
The key takeaway from the report is that it included a downward revision to personal spending growth (from 4.0% to 3.8%) that was offset by a higher estimate for nonresidential investment growth, government spending, and a downward revision to imports, which are a subtraction in the calculation of GDP.
Real final sales of domestic product, which exclude the change in inventories, increased 5.3% versus 5.1% in the advance estimate.
Overall, the second quarter still maintains the billing of being a strong quarter of economic growth for the U.S.
It may not be a strong open for the stock market today, however, as a lot of good news, and the expectation of more good news to come, has been priced in already. Accordingly, it seems market participants are drifting and shifting into Labor Day vacation mode.