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There is a lull in the upside action so to speak, as the equity futures are pointing to a lower start for the cash market.
Currently, the S&P 500 futures are down 15 points and are trading 0.3% below fair value, the Nasdaq 100 futures are down 79 points and are trading 0.4% below fair value, and the Dow Jones Industrial Average futures are down 107 points and are trading 0.2% below fair value.
This negative leaning is unlikely to cause any undue concern. Rather, it is apt to be viewed as a normal course of action for a market that has been on a tear.
Fittingly, there is some softness in the mega-cap stocks today that is acting as the main drag on the futures market.
Market participants, though, never seem too bothered by how the market is projected to open -- certainly not since the recovery off the October 2023 lows began. Their interests have been geared toward how the market trades intraday and how it closes. In that regard, concerns have been few and far between.
The stock market has traded with a heightened degree of Bob Marley confidence that "every little thing gonna be all right." So far, its trading optimism has been undiminished.
The U.S. economy's surprising strength has had a lot do with that along with the remarkable earnings power generated by most mega-cap companies. There are no earnings stories for the mega-cap stocks today, but the economic story is in focus with the second estimate for Q4 GDP.
That estimate showed a slight downward revision to 3.2% (Briefing.com consensus 3.2%) from the advance estimate of 3.3%, primarily due to a downward revision to private inventory investment. The GDP Deflator, meanwhile, was revised slightly higher to 1.6% (Briefing.com consensus 1.5%) from the advance estimate of 1.5%.
The key takeaway from the report is that there was an upward revision to personal spending growth (3.0% versus 2.8% in the advance estimate) that was driven by an upward revision to services spending (to 2.8% from 2.4%), underscoring the resilience of the U.S. consumer, who has been fortified by a solid labor market.
Separately, this morning's data also included the Advance Economic Indicators Report for January, which featured a widening in the International Trade in Goods deficit to $90.2 billion from $87.9 billion, a 0.5% increase in Retail Inventories, versus 0.6% in December, and a 0.1% decline in Wholesale Inventories, versus a 0.4% increase in December.
The Treasury market saw some gyrations in the wake of the reports, but within a tight range. Currently, the 2-yr note yield is down four basis points to 4.67% and the 10-yr note yield is down three basis points to 4.29%, little changed from where they were in front of the reports.
The earnings results since yesterday's close have produced their fair share of changes in the companies reporting results. eBay (EBAY), for instance, is a standout on the upside with a 5% gain, and Boston Beer (SAM) is a standout on the downside with an 11% loss. Still, none of the companies that reported have market-moving cachet.
That belongs to the mega-cap stocks, which are seeing a little cashing out before participants can determine if every little thing gonna be all right by the close.
