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Coming back from the Thanksgiving Day holiday, the stock market is poised to start today's abbreviated session on a positive note. The NYSE closes at 1:00 p.m. ET (the Treasury market closes at 2:00 p.m. ET).
Currently, the S&P 500 futures are up six points and are trading 0.1% above fair value, the Nasdaq 100 futures are up eleven points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are up 73 points and are trading 0.2% above fair value.
There isn't a lot of news flow of note. A lot of attention is naturally being paid to Black Friday, which has lost some of its frenetic panache given the 24/7, 365 days a year capability of online selling.
That's not to say consumers won't be out shopping today or that some malls won't look like an ant hill that got kicked over, but in general the Black Friday hoopla isn't what it used to be.
There is still a lot of hoopla, however, over the performance of the stock market this year. The major indices are at, or near, record highs, having been powered there by the mega-cap stocks but having been infused of late with a broadening out of the buying interest.
Small-cap stocks have led the post-election surge. The Russell 2000 is up 10.5% in November versus a 5.1% gain for the S&P 500. The S&P Midcap 400 Index for its part is up 8.6%.
Lower Treasury yields, which followed the news of Scott Bessent being nominated for Treasury Secretary, have been a breath of fresh air for a stock market contending with stretched valuations. The 10-yr note yield, which flirted with 4.50% last week, is at 4.20% this morning. That is roughly 10 basis points lower than where it stood the day before the November 5 election.
The 2-yr note yield is at 4.18% after pushing 4.40% last week. The fed funds futures market has grown a bit more confident in the prospect of a rate cut at the December FOMC meeting following the release of the FOMC Minutes for the November 6-7 meeting on Tuesday and PCE price index data on Wednesday that wasn't worse than feared.
According to the CME FedWatch Tool, there is a 66.3% probability of the Fed lowering the target range for the fed funds rate by 25 basis points to 4.25-4.50% at the December meeting versus 52.7% a week ago.
There won't be any U.S. economic data of note today. Notably, there was an uptick in November inflation readings for Tokyo and the eurozone that have not gone unnoticed. The former in particular has the dollar down 1.0% against the Japanese yen as traders mull the prospect of a rate hike by the Bank of Japan in December.
Other items being mulled this morning include France's budget issues, reports that the U.S. might temper some of its export restrictions for chip suppliers, OPEC moving its meeting from December 1 to December 5, and Bloomberg indicating Microsoft (MSFT) might be facing a broad FTC investigation.
By and large, though, market participants are rightfully mulling matters elsewhere that have little to do with the stock market.
