The futures for the major indices were up, then they were down, and now they are up again. The roller-coaster action is emblematic of a market that has been, well, like a roller coaster.
Currently, the S&P futures are up eight points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 41 points, which leaves them 0.6% above fair value, and the Dow Jones Industrial Average futures are up 33 points, which leaves them about 0.2% above fair value.
Market participants can be forgiven for showing a lack of conviction or, frankly, for feeling tired from all of the volatility. Maybe what we should say is that they are tired of the volatility.
So, we enter this morning with a lot of recycled news narratives.
The market is either worried about trade issues between the U.S. and China (when the futures and cash market are down) or feeling hopeful about trade negotiations (when the futures and cash market are up).
The uncertainty over the UK Brexit plan remains just as uncertain today as it did yesterday when Prime Minster May faced a "no confidence" vote from her own party -- and won -- and the day before yesterday when she didn't face a "no confidence" vote.
The Federal Reserve seems likely to raise the target range for the fed funds rate at next week's FOMC meeting. After that, it boils down to best guesses, which has been a driver of market volatility.
Concerns about global growth persist, because such concerns don't disappear overnight. To that end, ECB President Draghi said today that economic data suggest the eurozone may have some slower than expected growth in the immediate future and that risks, while still broadly balanced, are moving to the downside.
That view came at his press conference following today's ECB meeting where it was announced the ECB's asset purchase program would end this month, as was largely expected. It was also announced that the ECB's interest rates on the main refinancing operations, marginal lending facility, and deposit facility would be left unchanged, as expected, at 0.00%, 0.25%, and -0.40%, respectively.
Principal payments on maturing securities, it was said, would continue in full for an extended period of time past the date when the ECB starts raising interest rates, or longer if necessary. The ECB doesn't expect to raise rates until after the summer of 2019 at the earliest.
The market's response to the ECB decision was appropriately muted since it didn't contain any real surprises.
One item that has been a real surprise this morning is JPMorgan's upgrade of General Electric (GE) to Neutral from Underweight. That upgrade has shares of GE up nearly 13% in pre-market action, as the market is cognizant that the analyst at JPMorgan has been spot-on with his negative call on GE for some time. The upgrade today, then, is being considered by some as a potential bottoming signal for the beleaguered stock.
Turning to this morning's economic data, the Import and Export Price Index for November has stirred some thinking that inflation trends could be in a topping phase.
That's the key takeaway from the report, which showed import prices declining 1.6% in November and export prices falling 0.9%. Excluding fuel, import prices were down 0.3%. Excluding agricultural products, export prices were down 1.0%.
Nonfuel import prices were up 0.3% year-over-year versus up 1.5% for the 12-month period ending in November 2017. Nonagricultural export prices were up 2.2% year-over-year versus up 3.3% for the 12-month period ending in November 2017.
Initial jobless claims for the week ending December 8, meanwhile, dropped by 27,000 to 206,000 (Briefing.com consensus 228,000). Continuing claims for the week ending December 1 increased by 25,000 to 1.661 million.
The key takeaway from the report is that it helped quell for the time being burgeoning concerns about the rising trend in initial jobless claims. The four-week moving average declined by 3,750 to 224,750.