The stock market didn't have a lot to show for itself at the closing bell yesterday, other than perhaps some droopy eyelids since it acted yesterday like a tired market ready for a rest. It can't be blamed. After all, at yesterday's high (2910), the S&P 500 was up 6.1% in less than six full sessions.
Buyers appear to be sleeping in this morning, too.
The S&P futures are down seven points and are trading 0.2% below fair value. The Nasdaq 100 futures are down 29 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are down 59 points and are trading 0.2% below fair value.
The press is picking up on the political protests over a proposed extradition bill in Hong Kong as a key story of the day. It is noteworthy news, only it isn't really market-moving news outside of Hong Kong and the surrounding region.
The fact that it's a focal point underscores the lack of "new" news on the macro front to drive the U.S. market. To that end, there are separate reports discussing how the U.S. and China aren't making much of an effort these days to arrange new trade discussions, how ECB officials see scope to do more on the policy front if the economic situation calls for it, and how oil prices ($51.75, -$1.52, -2.9%) remain under pressure due to excess supply and worries about an economic slowdown.
Muted inflation pressures can also be added to the recycled news mix after the Consumer Price Index (CPI) for May.
Total CPI increased 0.1%, as expected, and so did core CPI, which excludes food and energy prices (Briefing.com consensus +0.2%). The monthly changes left the yr/yr readings at 1.8% and 2.0%, respectively, versus 2.0% and 2.1% for the 12 months ending in April.
The key takeaway from the report is that consumer inflation pressures remain muted, which in turn is going to reinforce the market's inflated expectations for the Fed to cut the target range for the fed funds rate sooner rather than later.
The food index increased 0.3% in May while the energy index declined 0.6%. Core CPI rose 0.1% for the fourth consecutive month, bolstered by a 0.2% increase in the shelter index that was offset in part by a 1.4% decline in the index for used cars and trucks.
Treasury prices, which were already up ahead of the report, caught another bid that pressed yields to their lows of the morning. The 2-yr note yield is down six basis points to 1.87% while the 10-yr note yield is down two basis points to 2.12%.
Those low rates proved instrumental in driving up applications for mortgage refinancings (+47%) and purchases (+10%) in the latest week, according to the Mortgage Bankers Association. Altogether, the MBA Mortgage Applications Index surged 26.8% in the latest week.
That should be a relatively supportive understanding for housing-related stocks today, but it obviously hasn't done much to wake up the broader market.
The early movers are predominately stock-specific stories. That would include Tesla (TSLA), which is up 2.7% after CEO Elon Musk said at the company's annual meeting yesterday that there is not a demand problem and that Tesla has a "decent shot at a record quarter on every level," according to The Verge. It also includes Mattel (MAT), which is up 6.4% after the Los Angeles Times reported the company rejected another bid from MGA Entertainment.
Some stocks, then, will prove to be early risers. The broader market, though, is hitting the snooze button, having grown tired in its sprint off the June 3 low (2728).