The stock market has that consolidation feel to it right now, which shouldn't be entirely surprising given the huge run it had in June and knowing that some notable trading catalysts are lurking on the near horizon.
The first catalyst is Fed Chair Powell's semiannual monetary policy testimony on Wednesday. The second catalyst is the release of the Consumer Price Index for June on Thursday. The third catalyst is the second quarter earnings reporting season, which is in a green-shoots phase now before going full bloom in a few weeks.
There are some other sticking points, too, like the uncertainty over trade talks between the U.S. and China, which will begin again this week, the geopolitical wrangling with Iran, and the process for getting to a budget deal and raising the debt limit.
The latter has come to the fore this morning after the Bipartisan Policy Center suggested the debt ceiling could be hit in the first half of September versus a prior projection of October or early November. That declaration has caused a bit of a stir, evidenced by the three-basis points jump in the 3-month bill yield to 2.25%.
In any event, buyers in the stock market are holding their fire for the time being.
The S&P futures are down 10 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 27 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are down 100 points and are trading 0.4% below fair value.
That downward drift is in action despite better-than-expected earnings results from PepsiCo (PEP) and word that Cisco (CSCO) is going to acquire Acacia Communications (ACIA) in a $2.6 billion, or $70.00 per share, cash deal that represents a 46% premium over ACIA's closing price on Monday.
The broader market, however, isn't being swayed by these developments, which is fitting for a market that is in a consolidation mode.
Instead, the trading pistons are firing in a mostly micro manner. To wit, PEP is up 0.3% in pre-market action while Dow component 3M (MMM) is down 1.8% after being downgraded to Sector Perform from Outperform at RBC Capital Markets.
Boeing (BA) is another Dow component that will be watched closely today as it is poised to report orders and deliveries data at 11:00 a.m. ET.
That news will move Boeing's stock. It could potentially move the market, but for now, the market is going to open stuck in a consolidation rut.