The stock market has moved up this week and, oh, by the way, so have interest rates. The 10-yr yield is at 2.99%, up five basis points for the week while the 2-yr yield is at 2.77%, up seven basis points for the week.
Whether those rising market rates work to curb some of the bullish enthusiasm remains to be seen. Thus far, the stock market has exhibited a bullish bias this week, supported by renewed leadership from the cyclical sectors.
That leadership has flowed from some hopeful headlines on trade matters, yet this morning's related headlines haven't sounded all that hopeful. Press reports in China say China will not bow to the trade pressure being applied by the U.S., and Canada is still okay waiting things out on a new NAFTA agreement.
Those headlines, however, haven't played the spoiler role.
The S&P futures are up three points and are trading a smidgen below fair value, which suggests the cash market is on course for a flattish start. The Nasdaq 100 futures are up 17 points and the Dow Jones Industrial Average futures are up 32 points.
Those standings changed little after the release of the Retail Sales and Export/Import Price Index Reports for August.
Total retail sales rose just 0.1% (Briefing.com consensus +0.4%) on the heels of an upwardly revised 0.7% increase (from +0.5%) in July. Excluding autos, retail sales jumped 0.3% (Briefing.com consensus +0.5%) following an upwardly revised 0.9% increase (from +0.6%) in July.
The upward revisions to the prior month helped mitigate some of the headline disappointment for August, yet the key takeaway from the report is that consumer spending is up and will continue to support real GDP growth in the third quarter.
Total retail sales were weighed down by a 0.8% decline in motor vehicle and parts dealers sales, as well as a 1.7% decline in clothing and clothing accessories stores sales. Gasoline station sales rose 1.7%.
Separately, the Export/Import Price Index for August revealed price declines for exports and imports for the second straight month.
Export prices fell 0.1% and were down 0.2% excluding agricultural exports. Import prices declined 0.6% and were down 0.1% excluding fuel.
On a year-over-year basis, nonfuel import prices were up 0.9%, versus up 1.0% for the 12-month period ending in August 2017. Nonagricultural export prices were up 4.1%, versus up 2.4% for the 12-month period ending in August 2017.
The key takeaway from the report is the recognition that nonfuel import prices have declined for three straight months, underscoring perhaps some of the effects of a stronger dollar. The moderation in nonfuel import prices could help temper budding inflation concerns for the time being.
There is more data yet to come.
The Industrial Production Report for August (Briefing.com consensus +0.4%; Prior +0.1%) will be released at 9:15 ET and will be followed by the Business Inventories Report for July (Briefing.com consensus +0.6%; Prior +0.1%) and the preliminary University of Michigan Consumer Sentiment Index for September (Briefing.com consensus 97.0; Prior 96.2) at 10:00 ET.
True to form this week, there hasn't been a swath of corporate news to excite the market. Adobe Systems (ADBE) reported better than expected fiscal third quarter results, but is little changed in pre-market action.
Alas, little changed is how the broader market is apt to look when the opening bell rings. That's not bad considering the S&P 500 is up 1.1% for the week entering today's trading.