The historic Trump-Kim Summit in Singapore is over, and while it has the media abuzz, it has left the futures market adrift.
Currently, the S&P futures are up two points and are trading 0.1% above fair value. The Nasdaq 100 futures are up six points and the Dow Jones Industrial Average futures are up 12 points.
It's an appropriate response really, because the agreement signed by President Trump and Chairman Kim was sweeping in its vision but limited in detail.
Briefly, Chairman Kim committed to work toward complete denuclearization of the Korean Peninsula while President Trump provided a security guarantee to North Korea and said the U.S. will stop its war games with South Korea.
The upside is that a dialogue has started and both sides have committed to holding follow-up meetings. The downside is that North Korea's history has left ample room for doubt that it will abide by its commitment.
Nevertheless, it's fair to say at this juncture that the summit has lowered the geopolitical heat surrounding North Korea. That can be considered a plus and has probably already been accounted for in the latest leg higher for the S&P 500, which is sitting just below important round-number resistance at 2800.
That may also explain why the reaction to the summit by the futures market has been relatively muted.
Another explanation can be pinned on a wait-and-see attitude in front of some important central bank meetings this week, beginning with the FOMC decision on Wednesday, the ECB decision on Thursday, and the Bank of Japan decision on Friday.
Only the FOMC is expected to raise its key policy rate. The focal point for global markets is whether there is any change in the Federal Reserve's rate-hike projections and whether the ECB signals that it has started discussions about winding down its quantitative easing program.
The key takeaway from the Consumer Price Index for May is that it validated the expectation for a 25 basis points rate hike by the FOMC tomorrow and provided some backing for the prevailing expectation among Fed members that there will be at least three rate hikes in 2018.
Total CPI increased 0.2% (Briefing.com consensus +0.3%), led by gains in the indexes for gasoline (+1.7%) and shelter (+0.3%). Core CPI, which excludes food and energy, also increased 0.2%, as expected, and was bolstered largely by the shelter index.
On a year-over-year basis, total CPI was up 2.8%, versus 2.5% in April. Core CPI was up 2.2%, versus 2.1% in April.
There hasn't been a sharp response in either the futures market or the Treasury market to the data, which was largely in-line with expectations.
Elsewhere, the corporate news isn't moving the broad market needle, yet that could change with the expected court ruling later today on the proposed AT&T (T)-Time Warner (TWX) merger, which is sure to stir up the media space when it is made.
Most of the corporate headlines have generated company-specific responses; however, the outsized gains in Restoration Hardware (RH) and Dave & Buster's (PLAY) following their earnings reports are anticipated to keep the consumer discretionary sector in the market's good graces.