The Labor Day weekend has concluded, which means the summer fun is (mostly) over. Whether the summer fun ends for the stock market is another question.
From Memorial Day to Labor Day, the S&P 500 jumped 6.6%. The Nasdaq Composite, however, surged 9.1%.
Those gains came in the face of the Fed raising interest rates, an escalation of trade policy skirmishes, and a crumbling of several emerging market currencies. In other words, the U.S. stock market climbed the proverbial wall of worry, supported by some impressive economic and earnings growth.
The major indices all set new record highs, with the exception of the Dow Jones Industrial Average. They can be forgiven then for looking a little groggy coming off the three-day weekend.
Currently, the S&P futures are down five points and are trading 0.1% below fair value. The Nasdaq 100 futures are down 24 points and the Dow Jones Industrial Average futures are down 79 points.
Today's open will be a soft one, partly because President Trump is taking a hard line with Canada, saying in a tweet that there is "no political necessity to keep Canada in the new NAFTA deal." The president also warned Congress that it should not interfere with the negotiations or he will simply end NAFTA entirely.
This hard line has been drawn before, which helps explain why the market isn't tripping on it. Nevertheless, it's enough bluster to provide an excuse to back off buying efforts following a great run by the stock market.
In the same vein, market participants are cognizant that the trade tension with China could ratchet up this week if the president ordains the implementation of tariffs on another $200 billion worth of Chinese imports, as was discussed last week.
That possibility will be an ongoing topic of conversation today along with oil prices ($71.19, +$1.39, +2.0%), which are rising as Tropical Storm Gordon rolls toward the Gulf Coast, and the dollar, which is strengthening as trade issues simmer and emerging market currencies remain under pressure.
Separately, there will be some added attention on the MoffetNathanson downgrade of Facebook (FB) to Neutral from Buy, the Raymond James upgrade of UPS (UPS) to Strong Buy from Market Perform, the deceleration in China's Caixin Manufacturing PMI to a 14-month low of 50.6, and the economic releases out of the U.S., which include the ISM Manufacturing Index for August (Briefing.com consensus 57.6; Prior 58.1) and Construction Spending Report for July (Briefing.com consensus +0.5%; Prior -1.1%) at 10:00 a.m. ET.
This week is a short one, but it will be an important one.
Aside from the trade matters, the Senate hearings for Supreme Court nominee Brett Kavanaugh will take place this week and the employment report for August will be released on Friday.