The stock market is poised to start today's session on a flattish note, yet one could also contend that it is still indicated sharply higher. To wit, the S&P 500 jumped 1.2% on Monday and it should still be up roughly 1.2% when the opening bell rings.
Currently, the S&P futures are up two points, which leaves them less than 0.1% above fair value.
No one should be terribly surprised that there is a subdued tone this morning. The stock market made a nice leap Monday, hot on the heels of a nice leap on Friday, which capped off a triple long jump over January, February, and March that left the S&P 500 up 13.1% for the first quarter.
It's possible that a little bit of buyer fatigue is setting in, as the S&P 500, up 22% from its December 24 low, is challenging the 2900 level in the face of a downtrend in earnings growth estimates.
Dow component Walgreens Boots Alliance (WBA) won't help turn that trend around either. It reported fiscal second quarter earnings that came up shy of consensus estimates and said it expects its FY19 adjusted EPS growth to be roughly flat, versus previous guidance of 7-12% growth.
Consumer market challenges in the U.S. and UK, reimbursement pressure, and lower generic drug prices were among the factors cited for the disappointing outlook. Shares of WBA are indicated 9% lower. Competitor CVS Health (CVS) is indicated 2.3% lower as it falls in sympathy with WBA.
Fortunately for the price-weighted Dow Jones Industrial Average, WBA is a lower-priced stock. Its losses may be material for shareholders, but they aren't overwhelming for the broader average.
The Durable Goods Orders report for February wasn't overwhelming either when it comes to the broader economic outlook.
New orders declined 1.6% (Briefing.com consensus -0.9%), pressured by a 4.8% drop in transportation equipment orders. Excluding transportation, new orders for durable goods were up 0.1% (Briefing.com consensus +0.2%).
The key takeaway from the report is that business spending was sluggish in February, evidenced by the 0.1% decline in nondefense capital goods orders excluding aircraft. Shipments of those same goods were flat. This is a line item that fits a slower growth outlook.
The reaction to the report was muted. The futures market continues to point to a flattish start for the broader market, which is still sharply higher for the week, month, and year to this point.