Retail stores, e-commerce sites, and airports were buzzing over the extended Thanksgiving Day weekend, but there isn’t any buzz this morning in the equity futures market.
Currently, the S&P 500 futures are down eight points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 24 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are down 67 points and are trading 0.2% below fair value.
That’s not a bad indication given the hefty gains the major indices are sitting on this month. Although there isn’t much buying interest at the moment, it’s more notable that there still isn’t much selling interest.
There are some trite explanations for the lack of selling interest: seasonality… momentum… mega-cap leadership… the trend is your friend until it isn’t.
They are all applicable, so any change of note in the performance of the major indices is likely going to boil down to the price action itself. That, too, is a trite view, but it will surely resonate with traders.
The market’s resilience to selling interest has been impressive, as the S&P 500 has moved from the threshold of 4,100 to the doorstep of 4,600 in a nearly straight line, reflecting the offsides positioning of short sellers and many participants underweight equities.
That parabolic move is why each day now invites the supposition that the market is due for a pullback, but it is the absence of any pullback of note that is fostering a fear of missing out on further gains that keeps the major indices in relatively good form. Again, this is why the price action looms as large as it does as a driving force.
There isn’t any corporate news of note to force the market to move in any direction. Many of the headlines revolve around the retail industry, which isn’t surprising as we have passed Black Friday and Small Business Saturday to arrive at Cyber Monday. ‘Tis the season for lots of retail activity.
Mastercard Spending Pulse said Black Friday retail sales were up 2.5% year-over-year. That isn’t exactly “robust,” but it would seem to fit with assertions going into the holiday selling season that consumers are apt to be more deliberate with their discretionary spending activity as they deal with inflation pressures and higher borrowing costs.
We’ll get a line on some of the inflation pressures on Thursday when the PCE Price Indexes are released as part of the October Personal Income and Spending Report. Today’s economic calendar will feature the October New Home Sales Report (Briefing.com consensus 720,000; Prior 759,000) as the lone release.
Over the course of the week, there will be a slate of earnings reports from some notable companies, including Zscaler (ZS), CrowdStrike (CRWD), Hewlett Packard Enterprise (HPE), Intuit (INTU), NetApp (NTAP), Workday (WDAY), Dollar Tree (DLTR), Foot Locker (FL), Five Below (FIVE), Okta (OKTA), PVH (PVH), Salesforce (CRM), and Snowflake (SNOW).
Today, then, has the feel of a slow start from a news standpoint, but that will change as the week progresses. Now, all that remains to be seen is if the price action changes.
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Originally Posted November 27, 2023 – Price action looms large
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