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The stock market will be closed today in observance of the National Day of Mourning for President Carter; however, the equity futures market is open until 9:30 a.m. ET and the Treasury market will be open until 2:00 p.m. ET.
Currently, the S&P 500 futures are down nine points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 48 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are down 26 points and are trading 0.1% below fair value.
Some news items being tracked this morning include:
- A Bloomberg report that the Biden administration is planning an additional round of restrictions on AI chip exports.
- An acknowledgment from Elon Musk that DOGE has a good shot at identifying $1 trillion in savings but that finding $2 trillion in savings would be a "best-case outcome."
- A dockworkers strike at East Coast and Gulf Coast ports will likely be averted as a tentative deal on a new six-year master contract has been reached.
- The ongoing, and tragic, destruction wrought by the wildfires in the Los Angeles area.
It shouldn't come as a surprise to hear that volume is on the lighter side this morning with equity trading operations dialed down given today's closure at the NYSE and Nasdaq.
It is a little surprising, though, to see equity futures with a soft disposition knowing that Treasury yields are still backing away from yesterday's highs that saw the 10-yr note yield reach 4.73% before settling at 4.69%. At the moment, the 10-yr note yield is down four basis points to 4.65%.
Yesterday's dip in yields helped the stock market recover from lower levels. The S&P 500 traded down to 5874.78 before rebounding and closing at 5918.25. The latter is still below the 50-day moving average (5952), but notably it translated into a positive outcome for the "first five days" indicator, often (but not always) a good portent for the direction of the market over the rest of the year, according to The Stock Traders Almanac.
That indicator was in jeopardy at yesterday's low, which had the S&P 500 down 0.1% over the first five trading days, but the eventual recovery effort, as yields fell, left the S&P 500 up 0.6% for the first five days.
Participants are going to be more attuned to how the rest of the month unfolds, cognizant of the trading adage that, "as goes January, so goes the year." It would be remiss not to say that this adage doesn't have a perfect track record either.
We'll see on Friday what track stocks take following the release of the December Employment Situation Report. Presumably, they will take their cue from the Treasury market's track in the wake of that data.
