It's a new day and everything is pretty much the same in terms of the stock market.
There is no selling pressure of note even though a number of pundits are claiming the stock market is due for a breather. The S&P futures are up one point, the Nasdaq 100 futures are up 19 points, and the Dow Jones Industrial Average futures are up seven points.
At some point, the stock market will succumb to some profit-taking interest, yet Warren Buffett got to the heart of the matter the other day when he acknowledged that Berkshire Hathaway is holding off selling investments until it sees what happens with the tax plan.
We doubt Berkshire Hathaway is alone in its thinking. That doesn't mean necessarily that the stock market is going to go vertical into year end, yet the reluctance of accounts to sell at this juncture because of the tax reform uncertainty may very well help prevent any material setback into year end absent an exogenous shock.
There aren't any exogenous shocks today. Heck, there aren't even any internal shocks.
That can help explain why the stock market continues to stand its ground. There may be a lot of big ideas under consideration, like who the next Fed chairman will be and whether a tax reform plan will get done, yet there is nothing concrete on either front to create a new signalling mechanism for market participants.
Accordingly, the stock market just keeps on keepin' on, emboldened by the reality that nothing -- as of yet -- is challenging the bullish-minded status quo.
Today's economic data didn't.
The Trade Balance report for August showed a narrowing in the deficit to $42.4 billion (Briefing.com consensus -$42.6 billion) from $43.6 billion in July, as exports were $0.8 billion more than July exports while imports were $0.4 billion less than July imports.
The key takeaway from the report is that it suggests net exports will remain a positive contributor to third quarter GDP forecasts. To that end, the third quarter real trade deficit average of $61.8 billion is roughly 1% below the second quarter average.
Separately, initial claims for the week ending September 30 decreased by 12,000 to 260,000 (Briefing.com consensus 265,000). Continuing claims for the week ending September 23 increased by 2,000 to 1.938 million.
The initial claims reading was impacted by Hurricanes Harvey, Irma, and Maria, but notably, it remained below 300,000 for the 135th straight week. That standing reflects continued tightness in the labor market and a general reluctance on the part of employers to cut payrolls at this juncture.
On a related note, the Challenger Job Cut report for September showed employers in the U.S. have announced 26.2% fewer job cuts through September versus the same period last year.
The market will be treated to a comprehensive report on labor market activity when the September Employment Situation report is released before the open on Friday.
In the meantime, it is being treated to early signs suggesting no one is in a rush to sell following the breakout to record highs for the major indices.