There wasn't a lot to be said for Monday's trading action, which had some traces of tryptophan in it. We'll have to see if market participants wake up today from their post-Thanksgiving stupor. At the moment, they appear to be shaking off some of the cobwebs as the futures for the major indices are all trading higher.
The S&P futures are up three points, the Nasdaq 100 futures are up eight points, and the Dow Jones Industrial Average futures are up 55 points, which leaves them all trading roughly 0.2% above fair value.
It should be a modestly higher open, then, for the cash market, which will be pondering a fair share of thoughts throughout the day.
One of the more prominent thoughts will relate to monetary policy. That's because the Fed Chair nomination hearing for Jerome Powell will take place today before the Senate Banking Committee, which convenes at 9:45 a.m. ET.
Mr. Powell released some prepared remarks, and the initial impression of those remarks is that Mr. Powell will represent a status-quo transition of leadership at the Federal Reserve based on what is known/thought about the economic outlook today. In other words, he isn't planning to start his Fed Chair position with a purposeful rock-the-boat stance.
Accordingly, equity index futures are exhibiting a slightly positive bias, the CBOE Volatility Index has drifted lower, and there has been little change in the dollar and the 2-yr note yield in the wake of his prepared remarks.
Another important topic on the mind of market participants is the fate of the Senate tax bill. There is an abiding hope that it will be approved later this week, yet there are also some halting press reports highlighting the idea that passage at this juncture isn't a slam dunk as a handful of GOP Senators appear to be sitting on the fence.
If the vote, which is expected on Thursday, gets bumped to next week, it could raise the stock market's angst level about its passage and lead to some short-term volatility.
It's a waiting game right now, which explains a bit of the stock market's reserved demeanor coming off last week's rally effort.
Separately, Adobe Analytics reported that Cyber Monday sales increased 16.8% year-over-year, providing another hopeful indication that this holiday shopping season could be quite a good one for the nation's retailers. The real question is what will profit margins look like after all of the holiday selling is done and that answer won't be known until early next year.
In the meantime, the positive sales reports are providing an element of support for the broader market, as is Amazon.com (AMZN) specifically. Shares of AMZN are up 6.2% over the last four trading sessions and they are indicated 0.6% higher this morning following the news that Goldman Sachs has raised its price target on the stock to a street-high $1450 from $1300.
Strength in AMZN will give a boost to the consumer discretionary sector, which should also be aided today by the news that Buffalo Wild Wings (BWLD) is going to be acquired by Arby's Restaurant Group for approximately $2.9 billion, or $157 per share, in cash. That is a 33.9% premium over the unaffected stock price on November 13, which is when speculation of a potential deal was reported in the press.