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The new year has gotten off to an excitable start from a geopolitical standpoint, as U.S. military forces went into Venezuela to capture Nicolas Maduro and his wife on the basis of bringing them to justice primarily for narcotics trafficking and weapons charges. This development has shaken political offices around the globe, but we can't say that it has shaken equity markets around the globe.
Japan's Nikkei soared 3.0% today; Germany's DAX Index is up 0.7%; and the equity futures market in the U.S. is indicating a modestly higher start for the S&P 500.
Currently, the S&P 500 futures are up 24 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 200 points and are trading 0.8% above fair value, and the Dow Jones Industrial Average futures are up 35 points and are trading 0.1% above fair value.
There isn't any real safety trade in the Treasury market either. The 2-yr note yield is down one basis point to 3.47%, and the 10-yr note yield is down one basis point to 4.18%. The dollar and metals prices, however, are higher.
Where one really sees the impact of the Maduro news is in the energy stocks, but not so much in the price of oil ($57.88, +0.56, +1.0%), which was well supplied before the Venezuelan action. Halliburton (HAL) is up 8.9%; Chevron (CVX) is up 6.4%; ConocoPhillips (COP) is up 5.5%; and Exxon Mobil (XOM) is up 3.1%, as investors presumably see a new—or renewed—growth opportunity.
Their leadership has been instrumental in supporting the futures market this morning, along with the leadership of NVIDIA (NVDA) and the semiconductor stocks, which had a big day on Friday.
Still, the market is playing catch-up to the Santa Claus rally period, which covers the last five trading sessions of the prior year and the first two trading sessions of the new year. Entering today, the S&P 500 is down 0.7% during this period, which ends at today's close.
The stock market, therefore, has some work to do if it is to shake the notion that stocks could be bought at lower prices later in the year if Santa fails to come to Broad and Wall.
There is a lot of time left in this trading day, but buyers need to show more conviction if Santa is going to show. Perhaps the December ISM Manufacturing Index (Briefing.com consensus: 48.4%; prior 48.2%) at 10:00 a.m. ET can energize them.
That is the lone economic release today, yet it is meeting up with a lot of ratings changes as analysts get back to work after the holidays.
