The S&P 500 has surged 90 points, or 3.3%, over the last six sessions, and the indication from the futures market is that it is going to keep running when the opening bell rings.
Currently, the S&P futures are up nine points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 28 points and the Dow Jones Industrial Average futures are up 91 points, leaving them 0.5% and 0.4%, respectively, above fair value.
There are several proximate causes for this bullish bias:
- A Bank of America/Merrill Lynch fund manager survey that indicates the allocation to equities is at its lowest since September 2016. This indication suggests many fund managers are missing/trailing this rally effort and will need to play catch up, providing another source of buying fuel to keep the rally going.
- Better than expected employment data out of the UK and a better than expected survey of economic sentiment out of Germany, which have helped stoke the narrative that the global economy is bottoming (or has bottomed).
- Technical buying momentum following the breakout of the S&P 500 above its November closing high.
- An expectation that major central bank policy announcements this week (FOMC on Wednesday and Bank of England on Thursday) will reinforce the view that major central banks aren't in any hurry to raise policy rates.
- A fear of missing out on further gains.
The corporate news flow isn't much of a factor as a broad market mover this morning.
There are some isolated stories of interest, like cannabis producer Tilray (TLRY) trading higher after its earnings report, shoe retailer DSW (DSW) trading lower after its earnings report, car maker Tesla (TSLA) fading on a regulator's allegation in court that Elon Musk never sought pre-approval for any of his tweets, and Boeing's (BA) stock remaining grounded after Canada said it will be investigating its 737 MAX approval process.
Overall, though, the broader market is moving on its own volition, which still favors a positive bias grounded in policy support.