One thing you need to know at the start of this week is that a three-day weekend awaits at the end of the week. That could effectively mean that things will remain relatively subdued on the trading front (i.e. volume remains low) -- at least until the end of the week when some key economic data is released.
For now, the major indices are called to open modestly higher. The S&P futures, the Nasdaq 100 futures, and the Dow Jones Industrial Average futures are all trading 0.2% above fair value.
Don't let that modest indication fool you, though. The futures are much improved from their overnight lows that had the major indices on track to open 0.2% to 0.4% lower.
The weak close on Friday, (geo)political angst, and concerns about the impact of Hurricane Harvey were among the lead excuses for the overnight weakness.
Those excuses have been set aside for the time being, supplanted by some optimism over M&A activity this morning and the ability of the market to bounce back so readily from those items that were thought to be drags in overnight trade.
Still, in light of the thin trading conditions, one needs to be careful not to give too much credit where credit isn't due for either losses or gains in pre-market action.
It is fair to say that there should be some active trading in the energy and insurance industries today as market participants trade around their views on the impact of Hurricane Harvey, which has produced record rainfall in Texas coastal cities, including Houston (Hi, mom), and has forced the closure of the Port of Houston as well as many refineries in the state. Crude futures are down 0.7% at $47.55 per barrel while gasoline futures are up 3.4% at $1.59 per gallon.
The biotech space is another area that should be active today thanks in large part to the news that Gilead Sciences (GILD) is acquiring Kite Pharmaceuticals (KITE) for $180.00 per share, or approximately $11.9 billion, in cash. That offer price is a 29% premium over Friday's closing price.
In other corporate news of note, reports indicate Expedia (EXPE) CEO Dara Khosrowshahi will be leaving Expedia to become CEO for privately-held Uber. That news is driving EXPE shares 2.9% lower.
All in all, the corporate headlines of note this morning are pretty sparse, much like the remarks on Friday were from Fed Chair Yellen and ECB President Draghi. Their speeches at the Kansas City Federal Reserve Symposium in Jackson Hole basically ranged from being academic to stating the obvious. They didn't break any new ground really.
We'll see if the economic data at the end of the week can stir some different thoughts on monetary policy matters. The date of note includes the Personal Income and Spending Report for July on Thursday and the Employment Situation and ISM Index Reports for August on Friday.
After the latter reports are released, the Labor Day weekend will officially begin for many traders, but on the other side of it, some serious business will begin with Congress back in session and Wall Street's trading desks more fully staffed.
September is around the corner while a modestly higher start for the stock market is straight ahead.