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There is a rebound mindset this morning following yesterday's steep losses. The question is, will that mindset persist, or will there be an inclination to sell into the opening strength?
Currently, the S&P 500 futures are up 46 points and are trading 0.9% above fair value, the Nasdaq 100 futures are up 180 points and are trading 1.0% above fair value, and the Dow Jones Industrial Average futures are up 353 points and are trading 0.9% above fair value.
The positive bias is being attributed to several factors:
- The thinking that the president won't move to fire Fed Chair Powell before the end of his term but that he is simply setting him up now to take the blame in the event of an economic downturn.
- Gains in the mega-cap stocks.
- Positive reports on the status of U.S.-India trade matters.
Separately, an uptick in the U.S. Dollar Index (+0.2% to 98.50) and a downtick in the 10-yr note yield (-1 bp to 4.40%) have tempered some of the "sell America" angst that has been stoked by their recent weakness.
There has been a slate of earnings news since yesterday's close. Most of the earnings results have been better than expected, but like any other reporting period, there are specific factors for each company that have driven stock-specific reactions.
Dow component Verizon (VZ), for instance, topped earnings expectations, yet its stock is indicated nearly 6.0% lower amid concerns about larger-than-expected postpaid phone net losses. Consumer staples company Kimberly Clark (KMB) topped earnings expectations, yet its stock is indicated 4% lower after the company trimmed its FY25 adjusted operating profit forecast on a constant-currency basis and curtailed its adjusted free cash flow outlook.
Defense company Northrop Grumman (NOC), meanwhile, came up shy of earnings expectations and slashed its FY25 adjusted EPS outlook. Shares of NOC are indicated 9% lower.
On a better note, Danaher (DHR), PulteGroup (PHM), GE Aerospace (GE), Pentair (PNR), and Lockheed Martin (LMT), to name a few, are all indicated higher following their reports. Tesla (TSLA), which is the reporting headliner after today's close, is indicated 1.0% higher.
There isn't any economic data of note today, but there is a $69 billion 2-yr note auction that will be closely monitored by market participants. Results of that auction will be released at 1:00 p.m. ET.
