MW: U.S. stocks: Futures higher ahead of consumer spending, ISM data
MADRID (MarketWatch) — Stock futures pushed higher on Monday, as investors waited for readings on consumer spending and manufacturing, and as oil prices continued to rebound.
Earnings from Exxon Mobil Corp. and Sysco Corp. are coming ahead of the bell.
Futures for the Dow Jones Industrial Average DJH5, +0.42% rose 53 points, or 0.3%, to 17,150, while those for the S&P 500 index SPH5, +0.36% added 6.6 points, or 0.3%, to 1,995. Futures for the Nasdaq-100 index NDH5, -0.10% were up 9.25 points to 4,150.50.
Sellers picked up the pace toward the end of Friday’s session, leaving the S&P 500 SPX, -1.30% down 1.3% as disappointing results and a downbeat report on gross domestic product took a toll. The index fell 2.8% on the week, and 3.1% on the month.
J.P. Morgan says it is all uphill for U.S. stocks: Risk-reward for U.S. stocks is worse than that of the eurozone or emerging markets, said Mislav Matejka and other analysts at J.P. Morgan Cazenove in a note on Monday. Disappearing liquidity support from the Federal Reserve is among the reasons they’re less keen on U.S. stocks.
“It is not a stretch to see U.S. earnings down this year, for the first time since 2008. Given that U.S. is trading at 16.4 times price/earnings, the high end of the range, this would not be a good combination,” said Matejka.
Extreme bullishness is another problem: “Not a single sell-side house is calling for the S&P 500 to be down this year, and that is coming after S&P 500 tripled from the ’09 lows and U.S. stocks,” said the analyst.
Data and China: December consumer-spending data is due at 8:30 a.m. Eastern Time, along with personal income and core inflation readings. The Markit PMI survey for January is due at 9:45 a.m. Eastern, while at 10 a.m., the Institute for Supply Management will release its index of U.S. manufacturing conditions for January. Construction spending for December is also on tap.
Crude-oil prices CLH5, +2.65% fell sharply in Asia, then rebounded just as strongly. Oil surged 8% Friday on news of a big drop in U.S. rig counts. On Monday, prices were briefly knocked by data that showed Chinese manufacturing contracted in January.
Crude was earlier weighed by news that United Steelworkers Union went on strike Sunday at nine U.S. refineries. Markets are worried that any dampening of refinery demand would likely curb crude production and exacerbate a global oversupply problem.
Oil refiners like Royal Dutch Shell PLC. RDS.A, +2.12% RDS.B RDS.B, +2.83% Tesoro Corp. TSO, +1.60% Marathon Petroleum Corp. MPC, +2.87% and LyondellBasell Industries LYB, +1.70% said they would keep plants operating under contingency plans.
Exxon Mobil XOM, +2.15% will report ahead of the opening bell, and investors will likely zero in on capital-spending plans and production plans.
Intel Corp. INTC, -0.03% said it has agreed to buy Lantiq, a German maker of communications chips, but did not disclose the terms.
European stocks under pressure: The Stoxx Europe 600 index SXXP, -0.44% was down as data showed manufacturing activity in the region stayed close to stagnation in January, with businesses cutting prices at the sharpest rate in more than 18 months.
The dollar USDJPY, +0.05% rebounded from two-week lows against the yen, as the downbeat Chinese data prompted selling of the U.S. currency. That data also weighed on Chinese stocks in Asian trading hours.
