Stocks began the week with a rebound, and the futures are suggesting the markets will start today’s session on the upside. Barring a significant rally today, though, the major U.S. indexes are on course to book a third-consecutive month of losses. In overnight trading, stocks in Asia were mixed and the major European indexes are all in positive territory. Elsewhere, oil prices have moved higher, with West Texas Intermediate up about 0.5%, to around $82.70 a barrel.
Third-quarter earnings season continues to roll along, with Apple (AAPL) and Eli Lilly (LLY) both announcing on Thursday, among the larger names releasing results this week. Meantime, Wall Street will be tuned in to what the Fed has to say when it wraps up its two-day Federal Open Market Committee (FOMC) meeting on Wednesday afternoon. With Treasury yields having moved up in recent weeks, market expectations are heavily weighted toward the central bank keeping its overnight lending rate unchanged.
Beyond the Fed watch, the week includes a number of other key economic reports. Tomorrow morning, the Institute for Supply Management (ISM) will release its Purchasing Managers Index (PMI) for October. Economists are calling for a reading of around 49%, which would be flat with the previous month. (Percentages above 50% indicate expanding activity, while those below 50% reflect contraction.) Should that actually be the case, it would mark the 12th-consecutive month of shrinkage for the industrial sector. Wednesday also brings the September Job Openings and Labor Turnover (JOLTS) report from the Bureau of Labor Statistics. Consensus is calling for the survey of job vacancies to dip to 9.27 million, versus the 9.61 million registered in September.
On Friday we’ll get additional statistics on the labor market, with experts calling for nonfarm payrolls in the U.S. to show a gain of around 190,000 positions in October, down from the 336,000 added the month before. Meanwhile, the unemployment rate is expected to remain unchanged, at 3.8%. Lastly, the ISM is due to release its non-manufacturing PMI for October. The Street is looking for activity in the services sector to show a 10th-straight month of expansion, with a reading of around 53.0%, down slightly from September’s showing of 53.6%.
Summing up Monday’s market action, the Dow Jones Industrials surged to a 511 point gain, or 1.6%, the S&P 500 advanced 49 points (1.2%), and the tech-laden NASDAQ tacked on 146 points (1.2%). – Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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