Currently, the S&P futures are down four points and are trading 0.1% below fair value. The Nasdaq 100 futures are down 20 points and the Dow Jones Industrial Average futures are down 27 points.
Trade issues are providing the headline excuse for why the futures market isn't showing more vigor this morning.
The issue at hand is a report by The Wall Street Journal that President Trump is inclined to move ahead with a 10% tariff on $200 billion worth of Chinese imports sometime this week. China has said it will strike back to any new tariffs and the report has suggested China may forego the proposed meeting between senior officials to discuss trade matters if the new tariffs are enacted.
The 10% tariff is not as high as the 25% tariff first proposed and it is said to be a negotiating ploy, whereby the president could dial up the tariff rate to 25% if the Chinese are not cooperative in trade negotiations.
It's a lot of political hullabaloo right now, yet the stock market itself isn't getting too worked up about it. The futures market this morning suggests as much.
The tenor of the trade headlines isn't constructive, yet the S&P futures are down a mere four points after the S&P 500 gained 1.2% last week?
Call it a respectful indication, but don't label it an indication that connotes fear about the trade situation. You'll know fear when you see it -- and this isn't it.
The futures indication, more or less, reflects a market in a wait-and-see mode.
There isn't much corporate news to sink its teeth into and there hasn't been much economic data to latch onto as a market driver.
The New York Fed's Empire Manufacturing Survey for September is the lone release this morning. It was weaker than expected at 19.0 (Briefing.com consensus 23.0) and down from the prior month's reading of 25.6, yet a number above zero for this survey still reflects growth in manufacturing activity.
The survey has not moved the market.
This week's economic calendar has a housing-market focus, beginning with the NAHB Housing Market Index for September on Tuesday and continuing with Housing Starts and Building Permits for August on Wednesday and the Existing Home Sales report for August on Thursday.
The housing data will be closely watched since rising interest rates are pushing up mortgage rates, and the higher mortgage rates are creating affordability issues for home buyers.
The yield on the 10-yr note has pushed above 3.00% today (currently 3.01%), which is a directional move that isn't going to ease mortgage rates nor make it easy for bond-proxy sectors like utilities and REITs.
Interest rate dynamics are a market mover and an economic driver, so the bearish edge there right now can also be thought of as a halting factor for the futures market this morning.