Stock market today: US futures nudge higher as new quarter kicks off

　　US stock futures edged into the green on Monday, starting the quarter on the front foot as political turmoil in France gripped investors counting down to the July 4 break and the key US jobs report.

　　Futures on the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) both nudged up roughly 0.2%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) were also about 0.2% higher.

　　Stocks are tiptoeing into the green to kick off a trading week cut short by the Independence Day holiday. Investors are debating whether the second half will bring a pullback or a broadening in the record-breaking tech-driven rally that lifted the benchmark S&P 500 to a near-15% gain this year so far.

　　Coming into focus is the June jobs report due Friday, watched for signs of cooling in the labor market that could help make a case for interest-rate cuts. Encouraging signs that inflation is slowing toward the Federal Reserve's target, plus emerging cracks in the economy, have spurred hopes for a policy pivot.

　　In the meantime, the prospect of political gridlock in France is engaging investors after the first round of voting in national elections. French stocks (^FCHI) rebounded from a rout, jumping as much as 2.8% as relief set in after Marine Le Pen's far-right party won by a smaller margin than exit polls indicated.

　　US political risks also started to emerge amid questions about whether President Joe Biden will step down as a candidate after a poor debate showing.

　　On the corporate front, Boeing (BA) said it has agreed to buy back supplier Spirit Aerosystems (SPR) in a $4.7 billion all-stock deal that will see a carve-up of its former subsidiary. US prosecutors are said to be seeking a guilty plea from the planemaker in a deal to settle criminal charges after two fatal 737 MAX crashes. Boeing stock slipped 1.3% in pre-market trading, while Spirit Aero shares rose almost 6%.

　　Meta (META) shares were little changed in the face of the EU's filing of antitrust charges against the Facebook owner over its “pay or consent” model for avoiding or accepting digital ads.

• The weekend was full of public support by prominent Democrats for President Biden after his brutal debate performance.

  　　The WSJ is reporting the Biden family urged him to continue moving forward during a weekend gathering at Camp David. Meantime, a CBS poll taken after the debate found that only 27% voters think Biden has the cognitive health to serve as President – down from 35%. Indeed those numbers made the rounds on TV over the weekend.

  　　In the end, no signs the market will have to endure a surprise (this would still be a surprise, I think) announcement of Biden dropping out of the race in the near-term.

  　　“All in all, the events following the debate have gone as well as Team Biden could‘ve hoped for. We think it’s more likely that they press ahead than that they throw in the towel. However, they – and many other stakeholders in this process – are still waiting for some of the most critical information: a better sense of what the voters think this all means and what the race looks like going forward,” said EvercoreISI strategist Sarah Bianchi in a note this morning.

  　　Optimism on corporate earnings continues

  　　Investors are certainly feeling upbeat about the outlook for corporate profits.

  　　The top 10 companies in the S&P 500 (^GSPC) make up 35% of the market cap, but only 23% of earnings, points out Apollo chief economist Torsten Slok in the below chart. The divergence has never been bigger.

  　　Note: Apollo is the parent company of Yahoo Finance.

  

  　　Too much optimism priced into stocks？ (Apollo)