The stock market is set to open today on a steady note based on the index futures indications. Currently, the S&P 500 futures are up two points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 18 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 13 points and are trading 0.1% above fair value.
There isn't a ton of conviction in the early going, partly because the market appears to be caught up in a swirl of headlines carrying loose ends.
- What will the Fed say at this week's FOMC meeting?
- What will come of the G-20 meeting and a purported meeting between Presidents Trump and Xi?
- How will Congressional leaders and the White House work out budget talks and avoid injecting unnecessary debt ceiling drama?
- Will incoming data point to slowing economic activity?
Those are just some of the loose ends. The Bank of Japan and the Bank of England are also holding policy meetings this week. Neither is expected to change their key policy rates, yet both -- along with the Federal Reserve -- are likely to highlight increased downside risks due to trade issues.
The central bank meetings will be a focal point throughout the week. A few focal points today include a weak Empire Manufacturing Index report for June and the news that Dow component Pfizer (PFE) is acquiring Array Biopharma (ARRY) for approximately $11.4 billion, or $48 per share, in cash.
The Empire Manufacturing Index did indeed point to a slowdown in manufacturing activity in the New York Fed region. In fact, it pointed to an outright contraction as the index slid 26 points to -8.6. That was the largest monthly decline on record and comfortably below 0.0, which is the dividing line between expansion and contraction for this report.
The New Orders Index fell 22 points to -12.0.
The report lacked any commentary that qualified specifically why there was such a downturn in business activity in June, so it is apt to be attributed to the trade uncertainty and a general slowdown in demand.
This particular data point didn't have much impact on the futures market. That's because it is a minor report and also because the weak report supports the market's hopeful case that a rate cut from the Fed will happen sooner rather than later.
In any event, the subdued response fits the tone of an otherwise subdued market heading into Wednesday's FOMC decision and following a week in which the 2900 level on the S&P 500 proved to be a tough nut to crack on a closing basis.