The S&P futures were showing a modest loss earlier, but they have rebounded and now they are showing a modest gain. Specifically, they are up five points and are trading 0.2% above fair value.
This positive indication is in place despite oil prices dropping 2.2% to $48.58 per barrel on heightened concerns about Libya's stepped-up production undermining production cutback efforts by other oil-producing nations.
The catalyst for the turn in the futures market, which began about 7:00 a.m. ET, is open for debate.
Today is the last day of the month, so the familiar line about window dressing by portfolio managers at the end of the month is making the rounds as a possible explanation. In other words, portfolio managers reportedly want to show for marketing efforts that they have exposure to the best-performing stocks.
That would naturally involve the "high-five" grouping that includes Apple (AAPL). Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), and Facebook (FB), all of which have held some influential sway in driving the market higher this month and this year. They are the five largest stocks in the S&P 500 by market capitalization, so if they are moving up together due to window dressing, or some other reason, it is a supportive development for the broader market.
On a related note, semiconductor company Analog Devices (ADI) delivered an impressive fiscal second quarter earnings report this morning, replete with better than expected guidance for its third quarter. ADI is a supplier to Apple , so it has offered a basis to extrapolate that its encouraging guidance means encouraging things for Apple, which is the largest stock by market capitalization.
Another factor in the mix reportedly is China's official manufacturing PMI report for May coming in better than expected at 51.2. The dividing line between expansion and contraction is 50.0; and May marked the tenth straight month the PMI reading has been above 50.0.
That excuse, though, loses some resonance as catalyzing the turn in the futures market considering that there wasn't any real reaction to it in the overnight futures trade following its release. We'll call it a nice-to-know development, then, but not a basis for spurring an uptick in futures buying around 7:00 a.m. ET.
In other developments, the preliminary CPI report for the eurozone showed a deceleration in the year-over-year change in consumer prices in May. That was true of total CPI, which slipped to 1.4% from 1.9% in April, and core CPI, which dropped to 0.9% from 1.2% in April. This report supports the views of the ECB's more dovish-minded members, yet it has not stopped the euro, which is up 0.3% against the dollar at 1.1221.
The dollar itself has been plagued of late by falling interest rates that have been tied in part to the belief that the Fed may not raise the fed funds rate again in 2017 after it presumably raises the target range at its June 13-14 meeting.
Time and the data will tell, although a few Fed officials have begun chirping about the need to possibly reassess their thinking on the likely policy path if inflation continues to soften. That is one reason why the average hourly earnings component of the May Employment Situation Report, which will be released Friday, is going to be closely watched by market participants.
The other economic data due out today includes the Chicago PMI report for May (Briefing.com consensus 57.3; prior 58.3) at 9:45 a.m. ET and the Pending Home Sales Index for April (Briefing.com consensus +0.8%; prior -0.8%) at 10:00 a.m. ET. The Fed's Beige Book on economic conditions will be released at 2:00 p.m. ET.
For now, though, the S&P futures are painting a bullish color for the start.