The fourth quarter got off to a good start, as each of the major indices recorded new record highs in a session that was accented by the continued outperformance of the Russell 2000.
There was no abject concern about the mass shooting in Las Vegas even though there was ample concern about what happened. In other words, the stock market compartmentalized the incident as a tragic event in and of itself, but one that wouldn't have any broad economic impact that would unduly disrupt corporate earnings prospects.
Trading in the futures market has a subdued tone about it this morning. The S&P futures are down a half point, the Nasdaq 100 futures are up nine points, and the Dow Jones Industrial Average futures are down seven points. Those indications, however, are all slightly above fair value.
Sellers, therefore, remain a reluctant bunch as the fear of missing out on further gains has held selling activity in check.
The fourth quarter has a history of being a good quarter for the stock market, so seasonality is a factor contributing to the stock market's resilient disposition.
Other factors include the optimism about a tax reform plan getting done, ongoing signs of a pickup in global growth, and broadening participation in the breakout to record highs for the major indices.
For good measure, Warren Buffett told CNBC that stock valuations make sense given how low interest rates are. That isn't a new revelation from Mr. Buffett, yet it has been supportive nonetheless since it is being repeated with the major indices having stretched further into record territory.
The 10-yr yield has crept up to 2.36% this morning. It stood at 2.05% only three weeks ago. That has been a sharp, upward adjustment, but even so, the yield on the 10-yr note is still 12 basis points lower than where it began the year.
So, yes, rates have gone up, but they are still low.
The CBOE Volatility Index is still low, too. It has slipped 1.4% to 9.32, reflecting a prevailing belief among market participants that there is unlikely to be any source of major upset in the next 30 days.
That view could change quickly on an unexpected headline, but there isn't currently much fear in the market about bad things happening. For what it's worth, that could lead to some bad price action if something bad does happen since there isn't a lot of inclination at this point to insure against that possibility.
Once again, the corporate news flow is light.
Some of the more notable developments include better than expected earnings from Lennar Corp. (LEN), an acknowledgment from Tesla (TSLA) that its Model 3 production was lower than expected, a report that Jeff Immelt stepped down as Chairman of General Electric (GE) sooner than expected, and Bank of America/Merrill Lynch upgrading General Motors (GM) to Buy from Neutral.
On the latter note, auto and truck sales for September will be reported throughout the day and they will be watched closely to see how they have tracked in the wake of Hurricane Harvey in August and in the face of Hurricane Irma in September.