The S&P 500 established a new closing high yesterday with every sector participating in the advance. The good news keeps coming, too.
Retail sales declined more than expected in Germany, the unemployment rate in the eurozone hit a record high 12.1%, Spain's GDP contracted 0.5% in the first quarter, the year-over-year inflation rate for the eurozone disinflated to a lowly 1.2% in April, industrial production declined more than expected in South Korea, and many US companies continue to report weak and/or declining revenue growth.
Add it all up and, well, there is little reason for the market not to think that central banks will keep on keepin' on with their accommodative policies and perhaps soon provide even more accommodation.
That thought is programmable magic for the algorithms calling the trading shots that continue to wound short sellers and continue to disenfranchise retail investors. To the last point, bear in mind that yesterday's rally to an historic closing high came on weak volume at the NYSE of just 599 mln shares.
Notwithstanding all of the aforementioned good news, the S&P futures are pointing to a slightly lower start for stocks.
An earnings miss by Pfizer (PFE), which is down 3.0% in premarket action, is acting as a drag of sorts, yet the market's disposition since November provides reason to believe the buy-the-dip trade will manifest itself in due time.
There is a batch of economic data today that includes the Case-Shiller Home Price Index (Briefing.com consensus +8.7%; prior +8.1%) at 9:00 a.m. ET, the Chicago PMI report (Briefing.com consensus 52.0; prior 52.4) at 9:45 a.m. ET, and the Consumer Confidence report (Briefing.com consensus 61.0; prior 59.7) at 10:00 a.m. ET.
The Employment Cost Index for the first quarter was released a short time ago and it was up 0.3% (Briefing.com consensus +0.5%). The uptick was driven by a 0.5% increase in total wages and salaries, although the first quarter growth in the index decelerated from a downwardly revised 0.4% increase (from 0.5%) in the fourth quarter.
This report will have little bearing on the market, which will be keying off the behavior of economically-sensitive sectors and the impending data releases.