From the breaking news department: the New England Patriots won Super Bowl XXXVI and the Toronto Raptors won the 2019 NBA Championship. Fans of those respective teams are wild with excitement at that breaking news.
How is that breaking news? It's not. We're just bringing it up again to make it sound new and to give fans of those teams something to feel good about this morning.
On a related note, the futures market is apparently feeling good about a recycled viewpoint expressed today by Treasury Secretary Mnuchin, who told CNBC that the U.S. and China were (emphasis our own) about 90% of the way there with a trade deal.
The past tense is important in this observation, because it is the key to explaining why this isn't "new" news. To qualify that assertion, here is what we penned in this column on April 3:
"An FT report suggesting a trade deal between the U.S. and China is roughly 90% done has left the stock market in good spirits, even though the other 10% that has not been done reportedly involves some of the biggest sticking points like enforcement mechanisms and forced technology transfers."
Alas, the S&P futures are up eight points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 30 points and are trading 0.5% above fair value. The Dow Jones Industrial Average futures are up 73 points and are trading 0.3% above fair value.
We suppose the market also likes Mr. Mnuchin's assertion that he is hopeful and thinks there is a path to complete the deal (haven't we heard that before, too?), although he added that the U.S. isn't going to do a deal just for the sake of doing a deal.
The latter point notwithstanding, there is a growing belief that Presidents Trump and Xi will try to turn down the temperature on the trade spat and at least agree to hold off on further tariff actions when they meet this weekend.
Then again, that belief was known yesterday, too, when the market was rolled back on the nagging sense that the trade spat could be a prolonged one and that a rate cut at the July meeting might not be the aggressive 50 basis points many have been hoping for.
The inference is that this morning's futures indication has some speciousness about it insomuch as it is being linked to an old view of trade deal matters.
Something that might be mattering more is the earnings report from Micron (MU), which was better than expected and replete with guidance that was better than feared. That combination has shares of MU up 8% in pre-market trading and has set a positive tone for the closely-watched and actively-traded semiconductor stocks.
Separately, FedEx (FDX) is up 2% after topping fiscal Q4 EPS estimates but guiding its FY20 EPS outlook below consensus. FDX has been under some notable selling pressure of late due to trade and economic growth concerns, so the positive response to an otherwise tepid outlook seems to be fostering a belief that the bad news was already priced into the stock.
There was a minor reprieve from growth concerns provided by the Durable Goods Orders Report for May. Total orders declined 1.3% (Briefing..com consensus -0.3%), yet orders, excluding transportation, increased 0.3% (Briefing.com consensus 0.1%).
The key takeaway from the report is that shipments of nondefense capital goods, excluding aircraft -- which factors into GDP forecasts -- increased 0.7% on the heels of a 0.4% increase in April while new orders for nondefense capital goods, excluding aircraft -- a proxy for business spending -- rose 0.4% after declining 1.0% in April.