If you were expecting some fireworks at today's open, you can go back to bed, as there is more fizzle than sizzle in the futures indication.
Currently, the S&P futures are down three points and are trading less than 0.1% below fair value. The Nasdaq 100 futures are down four points and the Dow Jones Industrial Average futures are down 38 points, leaving them less than 0.1% within fair value, respectively.
Looks like the continuation of a market that is waiting on some justification to make its next move of note. That could be a breakout above the November 2018 closing high (2813.89) for the S&P 500 or it could be a breakdown, for starters, back to the 2700 level.
According to reports, President Trump it seems would prefer a breakout. To that end, Bloomberg is reporting that the president is eager to get a trade deal struck with China, because he thinks it will act as a catalyst for a stock market rally.
He isn't alone in that position, yet the nature of how any trade deal is positioned will dictate whether it is worthy of a rally or a sell-the-news backlash. Part of the market's hesitation this week is that it is uncertain what will come of a purported trade agreement.
Will it have teeth with enforcement oversight and structural trade reform or will it be all gums with promises simply to buy more U.S. goods?
The December trade balance report was ammunition for the president and trade hawks to get China at least to buy more from the U.S. The goods deficit with China increased $3.2 billion to $38.7 billion; meanwhile, for all of 2018, the goods deficit with China increased $43.6 billion to $419.2 billion. Overall, the goods and services deficit was $621.0 billion in 2018, up $68.8 billion from $552.3 billion in 2017.
For December, the trade deficit widened to $59.8 billion (Briefing.com consensus -$57.8 billion) from a downwardly revised $50.3 billion (from -$49.3 billion) in November. The widening deficit was a byproduct of exports being $3.9 billion less than November exports and imports being $5.5 billion more than November imports.
The key takeaway from the report is that it will fuel the Trump Administration's fire to correct the trade imbalance with assertive policy actions.
The futures market didn't show much reaction to the report, yet the muted response is consistent with this week's general trading take on matters.
Outsized responses have been confined to individual stocks with news. Today's candidates in that regard include companies like retailer Abercrombie & Fitch (ANF), which is up 12.4% after reporting better than expected earnings, and RV maker Thor Industries (THO), which is down 9.4% after reporting earnings and issuing a cautious outlook.
The broader market for its part is meandering, as it awaits something new to get it going.