Let's get some of the important news out of the way first.
JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) all beat consensus earnings estimates with their first quarter reports; the IEA said it believes the oil market is close to balanced; China reported stronger than expected growth in its imports (+20.3% year-over-year) and exports (+16.4% year-over-year) in March; and the U.S. Producer Price Index (PPI) report for March was weaker than expected.
Seems to be a pretty good batch of headlines, yet the S&P futures are down five points and are trading 0.2% below fair value.
To be blunt, buyers just aren't buying it right now.
Their reluctance to do so has a political backing in that there is a great sense of confusion about White House objectives, the ability to pass a tax reform plan, and geopolitical entanglements with North Korea and Syria.
There is also the matter of the upcoming French presidential election, which is breeding a heightened sense of uncertainty that has manifested itself in a widening 10-year spread between the French OAT and German bund, the spike in the CBOE Volatility Index, and the persistent rally in the Japanese yen, gold, and the U.S. Treasury market, which are deemed safe havens.
Some of today's reluctance to get involved on the buy side can also be attributed to yesterday's technical breakdown, which featured a close by the S&P 500 below its 50-day simple moving average.
That area, as noted yesterday, had been a mainstay of technical support since the election, so there will be some concern that the closing breach of that important technical level will invite further selling efforts.
Today is also the last trading day of the week, and with geopolitical temperatures still on the high side, buyers may be inclined to keep to the sidelines ahead of the extended Easter weekend, which will also feature the closure of European markets on Monday.
In terms of this morning's data out of the U.S., final demand PPI was down 0.1% in March (Briefing.com consensus 0.0%) while final demand PPI, excluding food and energy, was unchanged (Briefing.com consensus +0.2%).
Notwithstanding the weaker month-to-month readings,the final demand index is up 2.3% year-over-year, which is the largest increase since March 2012. The index for final demand less food and energy is up 1.6% versus up 1.5% for the 12 months ending in February.
Separately, initial claims for the week ending April 8 dipped 1,000 to 234,000 (Briefing.com consensus 251,000) while continuing claims for the week ending April 1 dropped by 7,000 to 2.028 million.
Once again, the initial claims data served as a reflection of a tightening labor market.
The stock market for its part, though, continues to tighten on the screws of uncertainty that have political roots.