Market does a post-Super Bowl shuffle

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Chief Market Analyst

Sunday’s exciting Super Bowl went into overtime, which meant there was extra time to watch the Super Bowl, extra time to party for some viewers, and less time to sleep for all viewers (at least the ones east of the Mississippi River). Maybe that is why the equity futures market this morning looks like it is doing a post-Super Bowl shuffle.

Currently, the S&P 500 futures are down two points and are trading fractionally below fair value, the Nasdaq 100 futures are down seven points and are trading fractionally below fair value, and the Dow Jones Industrial Average futures are down 45 points and are trading 0.1% below fair value.

It is easy to blame the Super Bowl for the lackluster trading action, but it should be noted for the record that many markets in Asia were closed for holidays and that the S&P 500 had its own exciting finish on Friday, closing above 5,000 for the first time ever.

The inference here is that the equity futures market might have looked a little anemic today anyway even if there hadn’t been a Super Bowl. Participation would be thin regardless, and there is a sense that the market, along with the mega-cap stocks, is due for a pullback after logging gains in 14 of the last 15 weeks.  

There isn’t a lot of news flow to wake up the trading masses either. The most notable corporate headline involves a big M&A deal in the shale industry. Diamondback Energy (FANG) and Endeavor Energy Resources are merging in a $26 billion cash-and-stock deal that is inclusive of Endeavor’s debt.

Otherwise, the corporate news has a 3-and-out (football reference) feel to it, which is to say it is uneventful.

Things are apt to feel a little different by this time tomorrow. That could be due to some corporate headline in the making perhaps, but it will certainly be due to the release of the Consumer Price Index (CPI), which will be out at 8:30 a.m. ET on Tuesday.

Every inflation report will have added importance given the market’s awareness that the Fed is watching every inflation report to get a feel for when it might be able to cut the target range for the fed funds rate.

The CPI report is one of the most influential inflation readings, but the 11:00 a.m. ET release today of the New York Fed’s Consumer Inflation Expectations Report won’t go unnoticed.

On a related note, Treasuries have an early positive bias. The 2-yr note yield is down three basis points to 4.47% and the 10-yr note yield is down four basis points to 4.15%.

Originally Posted February 12, 2024 – Market does a post-Super Bowl shuffle

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