The major U.S. indexes began the week with slight losses, and the futures are suggesting a continuation of that trend at the start of today’s session. In overnight trading, markets in Asia were mixed, and the European exchanges are modestly in the red. Meanwhile, oil prices have edged higher, with West Texas Intermediate up about 0.4%, to around $75.20 a barrel.
Stocks have had a good run so far in November, with the Dow Jones Industrials up 6.9%, while the S&P 500 has gained 8.5% and the tech-focused NASDAQ has advanced 10.8%. A good part of this has been attributed to positive news on the inflation front, which increases the likelihood that the Federal Reserve will not have to raise its overnight lending rate.
On that front, investors are eagerly looking forward to the Personal Consumption Expenditures (PCE) Price Index for October, which is scheduled to be released on Thursday, for further confirmation. The report, which tracks the prices that consumers pay for goods and services, serves as one of the central bank’s key inflation indicators. The Wall Street consensus is calling for the so-called core PCE number (which excludes food and energy prices) to show a year-over-year increase of 3.5%, down from the 3.7% increase recorded for September. Market watchers are widely expecting the lead bank to leave rates unchanged at the next two Federal Open Market Committee (FOMC) meetings scheduled for mid-December and late January.
The economic calendar for the week also includes the National Association of Realtors’ report on pending home sales for October, also due out Thursday. Expectations are calling for a month-over-month decline of around 1.5%, versus the 1.1% gain registered in September. That same day, we get the Department of Labor’s report on initial jobless claims, which is expected to show an increase to 218,000, versus 209,000 the week before. Lastly, the Institute for Supply Management (ISM) is due to release its Manufacturing Report on Business for November on Friday. The consensus there is that the index will come in around 47.6%, up from 46.7% the month before, marking a 13th-straight month of decline. (Readings above 50% indicate expansion, while those below 50% represent contraction.)
Summing up Monday’s market moves, the Dow Jones Industrials were down 56 points, or 0.2%, the S&P 500 lost eight points (0.2%), and the tech-laden NASDAQ moved nine points lower (0.1%). – 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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