“Explanations” for overnight market moves have drifted from the merely comical and veered into the surreal. Case in point, this morning Bloomberg writes that “futures contracts on U.S. equity indexes rose, suggesting gains on Wall Street will be extended to a second day on stimulus optimism” and Reuters chimes in that “futures rose for a second straight day on Thursday as bets of a piecemeal fiscal stimulus deal lifted sentiment” while just hours earlier the Financial Times led with this:
In short, whichever direction stocks drift, that’s where one can find “stimulus sentiment” at any given moment. The only question we have is what is the direction of causality.
In any case, S&P futures rose for a second straight day after yesterday’s 1.7% surge because “there were more buyers than sellers” or whatever, with the S&P now back above the level where the S&P puked on Trump’s infamous “no more talks” tweet.