The major indices are in track to start today's session on a distinctly higher note. The S&P futures are up 10 points, the Nasdaq 100 futures are up 25 points, and the Dow Jones Industrial Average futures are up 133 points.
Remarkably, the terrorist incident in New York City after yesterday's close, which claimed the lives of eight people, doesn't seem to have had any negative impact on investor sentiment. The human toll is terrible, yet the fact of the matter in the market's mind is that it won't have any economic toll of note.
Market participants, therefore, continue to pay their toll to keep riding the stock market, which we were reminded yesterday has risen to a level that places the cyclically adjusted price-to-earnings (CAPE) ratio at its highest point since former Fed Chair Alan Greenspan made his infamous "irrationally exuberant" remark in December 1996.
It hasn't been lost on anyone that the stock market went on a tear over the next three years or so in the wake of Mr. Greenspan's remark as the dot-com boom was ignited. In other words, this market isn't quaking in its boots over the historically-high PE ratio, partially because it is falling back on the persistence of low interest rates and solid earnings growth to rationalize its standing.
Another factor underpinning today's early bias is the realization that it is the first trading day of a new month, which often invites new inflows. Additionally, market participants are cognizant that the month of November is the start of what has been historically the best six-month period for the stock market.
So, there is a seasonal factor in play at the moment that can help explain the distinctly bullish posture of the futures market.
Other supportive influences include the continued rise in oil prices ($54.95, +$0.58, +1.1%), optimism ahead of Facebook's (FB) earnings report after the close, an encouraging ADP Employment Change report which showed an estimated 235,000 private-sector jobs were added in October, the fear of missing out on further gains, and the hopeful belief that a tax reform plan will get passed soon.
On the latter note, the House GOP has delayed the release of its tax reform plan until Thursday. It had been previously thought the plan would be released today.
What is certain to be released today is the Federal Open Market Committee's (FOMC) latest policy directive. That should hit the wires at 2:00 p.m. ET. It isn't expect to contain any major surprises.
The target range for the fed funds rate should be left unchanged at 1.00% to 1.25%, the directive should note economic growth is improving in spite of the hurricanes in the third quarter, and the market should be left with the impression that the FOMC is likely on course to raise the target range for the fed funds rate again at the December meeting.
There isn't a press conference associated with this meeting, which takes place amid a bevy of press reports suggesting Fed Governor Powell will be named on Thursday by President Trump as his nominee for Fed chairman.
There is a lot to talk about today, including the release of the ISM Index and Construction Spending reports at 10:00 a.m. ET, and there will be plenty to talk about tomorrow. Soon enough, though, it will be all action, and the trading action at the start of today's session is destined to favor the bulls who don't live in CAPE fear.