The futures market is throwing off an opening indication, as it does every morning, but feel free to ignore it. This is a market that doesn't show its hand in pre-market trading.
The call doesn't come until later in the day when the early headlines have been fully vetted and the price action tells a more definitive story.
To that end, the tale of the tape of late has been to sell into strength, which is why market bulls are understandably anxious for a fairy-tale ending that involves a rally into the close and substantive gains for the major indices.
For what it's worth, there won't be a rally at the open.
The S&P futures are down three points and are trading 0.2% below fair value. The Nasdaq 100 futures are up 11 points and are trading in-line with fair value. The Dow Jones Industrial Average futures are up 16 points and are trading less than 0.1% below fair value.
The futures had been tipped higher earlier, bolstered by reassuring earnings results and outlooks from Dow components Walmart (WMT) and Cisco Systems (CSCO), yet there are many moving news parts hanging like a marine layer over the market, which may or may not clear out today.
Fed Chair Powell didn't throw the market a meaty bone in terms of the monetary policy outlook. He acknowledged last night that global growth is slowing, but he concluded with the main message that the U.S. economy is in great shape and that he believes we can accelerate growth.
Separately, political affairs in Europe are a sticking point.
Italy remains defiant with its 2019 budget deficit stance and the UK remains up in arms about Brexit negotiations, evidenced by today's news that Brexit Secretary Raab has resigned his post as he is unwilling to support the draft agreement brought to the public yesterday by Prime Minister May.
Mr. Raab's resignation has raised the uncertainty factor surrounding Brexit, the fate of the draft agreement in the British Parliament, and Ms. May's leadership position. That uncertainty has been captured in a falling pound, which is down 1.6% against the U.S. dollar to 1.2776.
The Brexit issues should get a lot of airtime today on the business channels, as will the reviews of this morning's economic data.
There were five releases, the most important of which was the Retail Sales report for October. Fortunately, that was the best report of the bunch, but by and large, the collective message of the data is that it didn't contain enough surprises to stir the passion of either buyers or sellers.
- Total retail sales increased 0.8% (Briefing.com consensus +0.5%) following a downwardly revised 0.1% decline (from +0.1%) in September. Excluding autos, retail sales jumped 0.7% (Briefing.com consensus +0.5%) following an unrevised 0.1% decline in September.
- The key takeaway from the report is that it reflects healthy consumer spending activity that will provide a positive input for Q4 GDP forecasts. Core retail sales, which exclude auto, gas station, building equipment and materials, and food services sales, jumped 0.3%.
- Initial claims for the week ending November 10 increased by 2,000 to 216,000 (Briefing.com consensus 214,000). Continuing claims for the week ending November 3 increased by 46,00 to 1.676 million.
- The key takeaway from the report is that the weekly increases did very little to alter trends in the four-week moving average for both series, which remain near historic lows and indicative of a tight labor market.
- Import prices increased 0.5% in October. Excluding fuel, they were up 0.2%. Export prices increased 0.4%. Excluding agricultural exports, they were up 0.5%.
- The key takeaway from the report is that nonfuel import prices remain tame, up just 0.7% year-over-year, versus 1.4% for the 12-months ending October 2017.
- The Empire Manufacturing Survey for November increased to 23.3 (Briefing.com consensus 20.0) from 21.1 in October, bolstered by an increase in the index for shipments, inventories, the number of employees, and prices paid.
- The key takeaway from the report, which uses 0.0 as the dividing line between expansion and contraction, is that manufacturing activity in the New York Fed region continues to run at a good pace.
- The Philadelphia Fed Index for November fell to 12.9 (Briefing.com consensus 20.5) from 22.2 in October, as most component indexes fell back from stronger levels.
- The key takeaway from the report is that manufacturing growth slowed in the Philadelphia Fed region in November, yet it still remains in an expansion mode with a reading above 0.0.