If today is the start of something big, it is hard to tell. Conviction seems to be lacking in the futures market, yet there is something to be said for that as the bigger story remains the lack of selling conviction.
At the moment, the futures for the major indices are trading 0.1% to 0.2% above fair value. That should translate into small gains for the cash market when the opening bell rings.
That is somewhat form fitting for how the cash market has gone about its business of late, holding its ground despite a rash of calls that it is due for a pullback. Friday was the latest case in point as the S&P 500 closed up two points, or 0.1%, for the day, leaving it up 0.3% for the week.
The news narrative this morning revolves around the start of earnings season, a pop in oil prices (+1.6% to $52.28) linked to an Iraqi military engagement in oil-rich Kirkuk, some hotter-than-expected Producer Price Index data out of China, and a speech by Fed Chair Yellen over the weekend that rehashed her belief that the economy is improving and that a gradual pace of removing policy accommodation is appropriate.
There isn't much in the way of market-moving corporate news.
Tesla (TSLA) fired hundreds of employees as part of its annual performance review, T-Mobile (TMUS) and Sprint (S) are reportedly aiming to get a deal done that does not include any asset sales, and Hershey (HSY) is said to be interested in bidding for Nestle's confectionery unit.
There are some ratings changes standing out in the morning mix.
- Apple (AAPL) was upgraded by Pacific Crest to Overweight from Sector Weight
- Goldman Sachs removed Ulta Beauty (ULTA) from its Conviction Buy List
- Deutsche Bank cut Adobe Systems (ADBE) to Hold from Buy
- Wells Fargo downgraded Norfolk Southern (NSC) and CSX Corp. (CSX) to Market Perform from Outperform
- RBC Capital Markets lowered Ford (F) to Sector Perform from Outperform, and
- Societe Generale trimmed Citigroup (C) to Sell from Hold.
Another item standing out is the Empire State Manufacturing Survey. It jumped to 30.2 in October (Briefing.com consensus (21.0) -- the highest level in three years -- from 24.4 in September.
This report isn't material in and of itself because of its small regional fix, yet the robust reading fits with the narrative that manufacturing conditions in general are looking pretty good in the eyes of purchasing managers.
In the same vein, Netflix (NFLX) is hoping its earnings report, which will be released after the close, will look good in the eyes of its investors. That is the headline report today and it will be looked at closely considering NFLX is up 61% year-to-date and up 97% over the last 52 weeks.
There will be a lot of things watched closely this week. Earnings results, and the response to the results, are just one of them.
Other focal points will include the start of the Chinese Communist Party Congress (Oct. 18), the Senate's budget resolution vote (estimated Oct. 19), military drills between the U.S. and South Korea, and the 30th anniversary of the 1987 stock market crash (Oct. 19).
Today, then, could start small, yet it just might be a big week before it is all said and done.