The stock market didn't climb a wall of worry on Monday. Instead, it simply kept climbing a stairway to Heaven as the S&P 500, Nasdaq Composite, Russell 2000, and S&P Midcap 400 extended their reach into record territory. The Nasdaq for its part closed above 8,000 for the first time ever.
The reported catalyst for Monday's advance was the news that the U.S. and Mexico struck a bilateral trade agreement.
That agreement played out very well from a PR standpoint, yet a trade "deal" isn't a deal until Congress says it is. That blessing has yet to be given; nonetheless, there was optimism that Congress will ultimately bless this deal, which could potentially look even more palatable if Canada becomes a party to it.
Negotiations with Canada to re-work NAFTA will be taking place this week, yet the Trump Administration is reportedly set to bring the deal it struck with Mexico to Congress by the end of the week whether Canada signs onto it or not.
For now, market participants seem to be content knowing something got done at least with Mexico.
There is no question, however, that market participants are content with what is getting done in the stock market.
The climb to record highs has been supported by strong earnings growth and interest rates that remain relatively low. It has also been supported by strong momentum in major leadership stocks like Apple (AAPL), which has risen 14.5% since the end of July.
Not surprisingly, there is some budding chatter that the broader market is overbought on a short-term basis and due for a pullback of some kind.
That pullback is unlikely to happen at today's open. The S&P 500 futures are up four points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 22 points and the Dow Jones Industrial Average futures are up 40 points.
Retailers Tiffany &Co. (TIF) and DSW (DSW) are early standouts. Those stocks are up 6.6% and 21.7%, respectively, after they impressed investors with their quarterly results and guidance.
Best Buy (BBY), on the other hand, is down 5.2%. The consumer electronics retailer topped consensus second quarter earnings estimates, but has been subjected to some profit taking after issuing third quarter EPS guidance that was below consensus. Shares of BBY are up 19.3% year-to-date.
Separately, the Advance International Trade in Goods report for July showed a deficit of $72.2 billion versus an upwardly revised deficit of $67.9 billion (from -$68.3 billion) for June.
The S&P Case-Shiller Home Price Index for June (Briefing.com consensus 6.4%; Prior 6.5%) will be released at the top of the hour and will be followed by the Consumer Confidence report for August (Briefing.com consensus 126.5; Prior 127.4) at 10:00 a.m. ET.
Those reports will draw some added attention, yet the focal point will continue to be the performance of the stock market and whether it can keep climbing its stairway to Heaven.