The S&P 500 is up 2.4% this week and the bulls are coming back for more this morning after enduring -- oh, the horror! -- a decline of 2.4 points, or 0.09%, on Thursday. Currently, the S&P futures are up 10 points and are trading 0.3% above fair value.
That positive disposition extends to the Nasdaq 100 and Dow Jones Industrial Average futures, too, which are up 36 points and 106 points, respectively, leaving them both 0.4% above fair value.
What has stock market participants feeling so good? Some are ascribing today's bullish bias to today's quadruple witching, which involves the quarterly expiration of index futures, index options, stock options, and single-stock futures. It's an esoteric reason, but one that has had legs all week as a reported market driver.
Other developments fall into the category of having had legs all year.
First, there are murmurings that the U.S. and China have made progress on trade talks, with President Trump volunteering that something with China, one way or another, should be known in the next three to four weeks.
Secondly, China's Premier Li Keqiang tapped into his inner central banker, reminding attendees at the closing of the National People's Congress that China will use reserve requirements and interest rates to support the economy.
On a related note, the Bank of Japan left its key policy rate unchanged at -0.1%, as expected, said it expects exports to show some weakness for the time being, and... drumroll please... that it "intends to maintain the current extremely low levels for short- and long-term interest rates for an extended period of time."
Trade progress and policy support -- there has been no better headline couplet to get the stock market going in 2019.
The Treasury market, meanwhile, keeps doing its thing, which is to say it's thumbing its nose at the stock market's giddiness. The yield on the 2-yr note is down one basis point to 2.44% and the yield on the 10-yr note is down two basis points to 2.61%.
A weaker than expected Empire State Manufacturing Survey for March has fostered some of this morning's resilience, having dropped to 3.7 (Briefing.com consensus 10.0) from 8.8 in February. A number above zero connotes expansion, so the March reading suggests regional manufacturing activity continued to expand, but at a slower rate than in February.
Slowing economic activity is not a new theme for the stock market or the Treasury market, which is why they've done what they've done in 2019, because slowing economic activity is expected to keep the Fed in check since it should keep inflation in check.
Some relatively disappointing earnings and/or revenue guidance from Adobe Systems (ADBE) and Oracle (ORCL) have kept those stock sin check in pre-market action. Separately, a report that Facebook's (FB) Chief Product Officer is leaving the company has kept that stock in check as well.
Their weakness isn't sinking the Nasdaq 100, though, as it uses a life vest of policy support and trade optimism, along with the S&P 500 and Dow Jones Industrial Average, to stay afloat in murky waters.