MW: Wall Street eyes a wary start to November with ISM ahead
Stock futures pointed to a cautious start for Wall Street on Monday as investors, coming off a big winning run in October, awaited key manufacturing data that could show more signs of softness in the U.S. economy.
Investors were also eyeballing disappointing China manufacturing data, which weighed on oil and triggered losses for Asia markets.
Dow Jones Industrial Average YMZ5, +0.08% futures rose 6 points to 17,600, while those for the S&P 500 index SPZ5, +0.07% were flat at 2,073.25. Nasdaq-100 futures NQZ5, +0.11% inched up under a point to 4,644.
Markets closed out an October rally on a down note Friday, with losses for the session of around 0.5% across major indexes after mixed earnings and weak economic data.
Data for Monday include the Markit PMI survey for October at 9:45 a.m. Eastern Time, followed by the Institute for Supply Management’s manufacturing index for the same month. Economists polled by MarketWatch are forecasting a reading of 51% for ISM. A reading above 50% indicates expansion, but some analysts expect the number could stay right at the 50% mark.
“But, if the actual number is even weaker than this, the market could go on the edge as investors will not be comfortable with Fed sending hawkish signals when the economic data is soft, and on top of that we also have the Chinese growth problem,” said Naeem Aslam, chief market analyst at AvaTrade, in a note.
Construction spending for September is due at 10 a.m. Eastern.
The biggest data will come at the end of the week with October nonfarm payrolls. A snapback in that data could trigger a December interest-rate rise, according to some economists.
Stocks to watch: The week will be dominated by energy companies, with expectations of an earnings decline for the sector of 65% year-over-year, which could derail momentum for the stock market. Noble Energy Inc. NBL, +2.11% will report ahead of the bell and Pioneer Natural Resources Co. PXD, -0.64% will report after the close.
Chipotle Mexican Grill Inc. CMG, -1.23% could be active after the restaurant chain said it has closed 43 of its Washington state and Oregon locations over an investigation into an E. coli outbreak.
Other markets: Asian markets finished in the red almost across the board on Monday, with the Shanghai Composite Index SHCOMP, -1.70% dropping around 1.7%, after a private gauge of China’s manufacturing activity marked the eighth-straight month of contraction. The Chinese yuan USDCNY, +0.3325% meanwhile, fell as much as 0.4% against the dollar, its biggest one-day drop since after officials devalued the currency in August.
The Nikkei 225 index NIK, -2.10% fell from a two-month high, closing down 2.1%.
The yen rose against the dollar USDJPY, +0.01% as investors grew risk-averse after the China data, which also weighed on oil prices CLZ5, -1.67% Gold GCZ5, -0.40% drifted lower.
European stocks SXXP, +0.43% moved higher after PMI data from the eurozone unexpectedly rose.
