Remember how the stock market started Friday on a sharply lower note? And remember how the basis for that sharply lower open was trade concerns after the White House announced a 25% tariff on a list of Chinese goods worth about $50 billion? And remember how China said it was set to impose tariffs on an equivalent amount of U.S. goods?
Okay, good. Because you probably also remember that the S&P 500 finished Friday down just 0.1%, having rallied back from its early loss.
We point this out, because the futures market is presaging a decidedly lower open for the cash market this morning and the basis for that disposition reportedly is concern about the growing trade tension with China.
That's probably got a lot of people thinking that we'll see a similar buy-the-dip effort today.
They may be right. After all, this market has had a knack for starting on a weakish note and then recovering as the day progresses, steering clear after markets in Europe close of whatever headliner inhibitions it might have had previosuly.
Then again, maybe Friday -- a quarterly options expiration day -- was a head fake and today is the market's true self following a weekend of reflection on some clearly negative trade headlines.
We just don't know, so we'll have to play it safe and call it in exactly the manner the futures market is calling it right now, which is to say it will be a decidedly lower open for the cash market.
The S&P futures are down 17 points and are trading 0.6% below fair value. The Nasdaq 100 futures are down 51 points and the Dow Jones Industrial Average futures are down 202 points, leaving them both about 0.8% below fair value.
Strikingly, there hasn't been much of a dash to safety this morning in the Treasury market. Maturities across the curve are all down just one basis point in yield, which is a little defensive in nature, but not at all a run-for-the-hills move. The U.S. Dollar Index, meanwhile, is basically flat.
The action elsewhere, then, is making it look like stocks are having their own little pity party at the moment.
All of the other news has been background noise and has maintained a mostly stock-specific orientation.
Dow component Walt Disney (DIS) was downgraded to Sell from Hold at Pivotal Research Group; Google (GOOG) made a $550 million investment in JD.com (JD); Rent-A-Center (RCII) agreed to be acquired by Vintage Capital for $15.00 per share in cash; Japan reported stronger than expected export and import data for May; and, well, the reporting focus still remains on "trade concerns."
The lone economic release of note today is the NAHB Housing Market Index for June (Briefing.com consensus 70; Prior 70), which will be out at 10:00 a.m. ET. This report will impact the trading behavior of the homebuilding stocks.
For the time being, though, the trading behavior of the broader market will be on the petulant side of things as it stews reportedly about trade matters that didn't seem to matter much by day's end on Friday.