It may not look like much at first glance, yet things are looking a lot better in the futures market than they did overnight. The S&P futures, down 22 points at one juncture, are now up one point and are trading 0.2% above fair value.
Similar trend reversals have taken root for the Nasdaq 100 futures (+1), which had been down 90 points, and the Dow Jones Industrial Average futures (+15), which had been down 224 points.
Yesterday's weak finish on Wall Street, combined with trade worries that took down Asian markets, and diplomatic angst over the U.S. threatening sanctions on importers of Iranian oil after the end of October, had cast a pall that weighed on the futures market.
That weight was lifted, however, by a report suggesting the White House is going to defer to the Committee on Foreign Investment in the United States (CFIUS) on matters involving, well, foreign investment in U.S. companies that provide sensitive technology.
The implication for market participants is that the reliance on CFIUS is a seemingly less strict avenue for restricting foreign investment than what had been feared on Monday when there were conflicting reports about the administration potentially rendering its own sweeping edict on foreign investment restrictions.
The CFIUS headline has provided a measure of protectionist-related relief, yet the understanding that the White House has a knack for calling its own shots when it sees fit has acted as a governor on some of the bullish enthusiasm for the CFIUS news.
Nevertheless, the stage is set for a modestly positive open that didn't look likely just three hours ago.
The Durable Goods Orders Report for May, which was mixed, didn't disrupt the shift in trading sentiment.
Durable goods orders declined 0.6% (Briefing.com consensus -1.0%) on the heels of an upwardly revised 1.0% decline (from -1.7%) in April. Excluding transportation, durable goods orders declined 0.3% (Briefing.com consensus +0.4%) after increasing an upwardly revised 1.9% (from +0.9%) in April.
The key takeaway from the report is that the downturn in May appeared to be a simple pullback from a robust month of order activity, excluding transportation, in April. To wit, orders for fabricated metal products fell 1.2% after increasing 3.3% in April.
On another level, the May report won't provide added ballast to Q2 GDP growth.
Shipments of nondefense capital goods excluding aircraft, which jumped 1.0% in April, were down 0.1% in May. New orders for these same goods, which are viewed as a proxy for business spending, dipped 0.2% after increasing 2.3% in April.
There has been a smattering of corporate news creating a positive buzz.
General Mills (GIS) exceeded fiscal fourth quarter earnings estimates and provided reassuring FY19 guidance; meanwhile, Conagra Brands (CAG), which also topped fiscal fourth quarter expectations, announced a $10.9 billion, or $68.00 per share, cash-and-stock offer for Pinnacle Foods (PF).
Those headlines are expected to generate some added trading activity in the consumer staples sector, which is down 9.7% year-to-date.
The S&P 500, on the other hand, is up 1.8% year-to-date after declining 1.2% this week on matters pertaining to international trade and efforts to take some profits from crowded stock market trades.