Following a negative start to the week, stock futures are pointing to a small advance at the opening bell. In overnight trading, stocks in Asia were mostly up. Meanwhile, the European indexes are also largely in the plus column. Elsewhere, oil prices are showing a modest uptick, with West Texas Intermediate crude up about 0.7%, to around $72.00 a barrel.
While the U.S. Presidential election will be grabbing most of the headlines today, investors are also focused on this week’s Federal Open Market Committee (FOMC) meeting. Wall Street is fairly confident that the central bank will cut its overnight lending rate by a quarter percentage point, to a range of 4.50%-4.75%. Instead, analysts will be focusing more on the commentary Chair Jerome Powell will provide on Thursday at the conclusion of the two-day meeting. As it stands, the consensus is calling for one more 25-basis-point cut before the year is over.
The economic calendar for the week also includes the Institute for Supply Management’s (ISM) report on the non-manufacturing (services) sector for last month, which is due out this morning. Estimates are suggesting that the Purchasing Managers’ Index (PMI) will stay on the positive side, coming in around 53.7, versus the 54.9 recorded in September. (Readings above 50 denote expansion, while those below 50 indicate contraction.) If the prognostications are close to the mark, it would be the fourth-straight month of growth in activity.
In addition to the Fed’s rate decision, Thursday will also include the latest report on initial jobless claims from the Department of Labor. Estimates are suggesting an increase of about 4,000 claims compared to the week before, to 220,000. We’ll also get the latest report on consumer credit, where the Street is expecting total outstanding installment debt increased around $14.3 billion in September, compared to $8.93 billion the month before.
In the meantime, earnings season continues to roll on. Among the larger names reporting this week are Qualcomm (QCOM), Gilead (GILD), and CVS Health Corp. (CVS) due out Wednesday, followed by Arista Networks (ANET), Duke Energy (DUK), and Airbnb (ABNB) on Thursday, among many others.
Summing up Monday’s moves, the Dow Jones Industrials fell 257 points, or 0.6%, the S&P lost 16 points (0.3%), and the NASDAQ composite declined 59 points (0.3%). – 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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