The stock market had a fender bender yesterday at the intersection of being short-term overbought and worrying about the fate of the GOP's tax bill. The repair work, however, is already underway considering the S&P futures are up eight points, the Nasdaq 100 futures are up 18 points, and the Dow Jones Industrial Average futures are up 82 points.
If those gains hold to the opening bell, the major indices will recover just about all of what they gave back yesterday (which wasn't much in the grand scheme of things).
The rub yesterday was the report that Senator Rubio plans to vote 'No' on a compromise tax bill if it does not include a provision to expand the refundability of the child tax credit. That created some angst about the GOP being at increased risk of seeing its tax reform effort fail since it is assumed Senator Corker, who voted 'No' to the Senate's version of the tax bill due to concerns about increasing the deficit, will also vote 'No' on the compromise tax bill.
The GOP can only afford to lose two votes in the Senate (assuming the vote comes before Doug Jones is sworn in as the Senator from Alabama early next year) to pass the bill with a simple majority (Vice President Pence is the tiebreaking vote).
Hence, with health concerns surrounding Senator McCain, and a handful of other GOP Senators still on the fence with their votes, there was a wee bit 'o concern Thursday that the compromise on the tax bill wasn't solidified like many had thought it was.
Well, that concern has been tabled this morning. The index futures are the guide there and they have rebound written all over them.
Still, with the fluid state of headlines on the status of tax negotiations, one shouldn't dismiss the possibility of some whippy price action after the open.
There isn't much else from a macro standpoint that has captivated the market's attention this morning, other than perhaps the report that manufacturing sentiment in Japan hit an 11-year high.
On a related note, the New York Fed's Empire Manufacturing Survey for December showed a dip in sentiment to 18.0, as expected, from 19.4 in November. That won't ruffle any economic feathers since it is just a small dip and considering the index is well above the 0.0 line demarcating expansion and contraction.
The Industrial Production and Capacity Utilization report for November will be released at 9:15 a.m. ET.
On a micro level, there are some story stocks of note.
Oracle (ORCL), Adobe Systems (ADBE), and Costco (COST) all reported quarterly results after Thursday's close. ADBE and COST are up 1.8% and 2.5%, respectively, in pre-market trading while ORCL, which reportedly disappointed with the revenue growth outlook for its cloud business, is down 5%.
Separately, railroad operator CSX Corp. (CSX) is down 9% on the news that its CEO, E. Hunter Harrison, is on a medical leave due to unexpected complications from a recent illness.
The broader market for its part remains poised for a healthy start to the trading action.