S&P 500; US Indexes Fundamental Daily Forecast – Business as Usual Today with an Air of Caution

U.S. stock index futures are pointed towards a lower opening based on the pre-market session. While the price action suggests a negative reaction to rising tensions between North Korea and the United States, traders will also have an opportunity to react to a fresh batch of corporate earnings and U.S. economic data.

In the futures markets, at 1124 GMT, the September E-mini S&P 500 Index futures contract is trading 2463.50, down 9.50 or -0.37%. The September E-mini Dow Jones Industrial Average futures contract is at 21970, down 48 or -0.22% and the September E-mini NASDAQ Composite is trading 5885.75, down 36.75 or -0.62%.

Forecast

Geopolitical events continue to be at the forefront. If the tension between the U.S. and North Korea continues to escalate then look for investors to reduce their exposure to higher-risk assets. Until there are new developments, traders are likely to focus on earnings and economic data today.

Investors are going to eventually grow tired of the sabre rattling between the two countries and more emphasis will shift back to the traditional fundamentals. At this point, there is either going to be some kind of a peace agreement, or a battle. There may be some buying on the dips if the indexes reach value areas as investors begin to divorce themselves from the headlines.

It’s also going to be a busy day as far as earnings are concerned. Kohl’s, Macy’s, Blue Apron, Canada Goose, News Corp., Nordstrom and Snap are all scheduled to report earnings before and after the bell.

On the data front, U.S. producer inflation is expected to come in at 0.1%, unchanged from the previous month. Core PPI is expected to rise by 0.2%. Weekly unemployment claims are expected to come in at 240K, the same as last week.

The Treasury Budge is also expected to be released at 1800 GMT.

New York Fed President William Dudley is also scheduled to speak. He is considered one of the most powerful members of the Federal Open Market Committee. He tends to lean toward the dovish side, but close to the middle and Fed Chair Janet Yellen.

Early indications are it will be business as usual today, however, there is some caution in the air.