Today’s Big Picture Asia-Pacific equity markets are generally closed today to mark a cornucopia of mid-autumn thanksgiving festivals, while Indian markets are closed as the country honors the birthday of the “Father of the Nation,” Mahatma Gandhi.Those markets that were open finished the day mixed.Japan’s Nikkei declined 0.31% as rising rate worries played into investor sentiment and Australia’s ASX All Ordinaries fell 0.20%, while Taiwan’s TAIEX rose 1.24% in a broad rally led by Electronic Technology names.European markets are mostly in the red as of midday trading, and U.S.equity futures point to a mixed market open later this morning as the 10-year Treasury yield climbed further early this morning.
Following the seasonally weak equity markets of August and September, where declines wiped out July gains, investors will be looking to see if the historical pattern of rebounding in October holds.While the U.S.Congress approved a short-term spending bill that will fund the federal government through November 17, there are headwinds blowing that could limit that positive seasonality.
Those include the expanded UAW strike as well as striking Las Vegas hospitality workers, and the potential for 75,000 healthcare workers striking at Kaiser nationwide this week.
There is also the resumption of student loan repayments that will see nearly 44 million borrowers resume paying an average of $393 per month after a three-and-a-half-year hiatus.Topping it off, the near-term upward climb in oil prices, as well as the dollar, could be issues for companies when they report their quarterly earnings in the coming weeks.
While this week may slow for quarterly earnings, we have a big week of economic data that could alter market expectations for both the economy and Fed monetary policy.We also have several Fed speakers over the next few days, including Fed Chair Jerome Powell later today.Investors will be keen to hear Powell’s comments following last week’s better-than-expected August core PCE price index figure.
Data Download International Economy
China’s NBS Manufacturing PMI increased to 50.2 in September from 49.7 in August, topping market forecasts of 50.0 and it was the first growth in factory activity since March.The September Non-Manufacturing PMI rose to 51.7 from 51.0 a month earlier, the ninth straight month of expansion in the service sector and the strongest pace since June.
The Caixin China General Manufacturing PMI declined to 50.6 in September from August’s six-month high of 51.0 and below market estimates of 51.2.It was the second straight month of increase in the sector.Input cost inflation accelerated to the fastest pace since January due to higher raw material prices leading output prices to rise for the first time in seven months.
The Caixin China General Service PMI dropped to 50.2 in September from 51.8 in the previous month, pointing to the softest increase in services activity since the start of the year, as both business activity and new orders grew the least in 2023.
The au Jibun Bank Japan Manufacturing PMI was revised slightly downward to 48.5 in September from the flash reading of 48.6 and the final figure of 49.6 in August.The September print was the fourth straight month of fall in factory activity and the steepest pace since February.
The HCOB Eurozone Manufacturing PMI was confirmed at 43.4 in September, little changed from the previous month’s 43.5.
This figure signaled the fifteenth successive month of contraction in the bloc’s industry sector, as new order inflows dropped at one of the steepest paces seen in the survey’s 26-year history.
The S&P Global/CIPS UK Manufacturing PMI came in at 44.3 in September, which was little changed from the preliminary estimate of 44.2 and slightly up from August’s 39-month low of 43.0.Even so, it ranked among the weakest readings seen over the past 14 years.
Domestic Economy
At 9:45 AM ET S&P Global will publish its final U.S.Manufacturing PMI data, which is expected to rise to 48.9 from 47.9 the prior month.We’d remind readers, a PMI reading below 50 points to contracting data.Soon thereafter at 10 AM ET, the Institute for Supply Management, more commonly referred to as ISM, will share its findings on the manufacturing economy during September.The headline figure is expected to rise slightly to 47.7 versus August’s 47.6.Inside both reports, folks will be looking at data for new orders and comments for both inflation and job creation.
Also at 10 AM ET, August Construction Spending will be released and the market consensus sees it rising 0.5% month over month, a tad slower than July’s 0.7% gain.Readers will want to parse the report between residential-related construction and non-residential for insight into the housing market and infrastructure spending.
Markets
Friday saw markets shift tone once again to close out the week.
The previous two days had seen markets start to pick up but at the end of the week, the optimism that had fueled that brief rally gave way to a more pragmatic assessment.The Nasdaq Composite was the only broad index to post gains, up 0.14% as Consumer Discretionary (0.53%) and Technology (0.34%) were among the few sectors closing higher.The S&P 500 declined 0.27%, the Dow fell 0.47% and the Russell 2000 closed 0.51% lower.Energy took the biggest hit, down 2.02% followed by Financials (-0.93%) and Healthcare (-0.76%).
In individual names, shares of Nike ( NKE ) were off to the races, jumping 6.68% as investors decided they liked what they heard coming out of the company’s latest earnings announcement.
Here’s how the major market indicators stack up year-to-date:
Dow Jones Industrial Average: 1.09% S&P 500: 11.68% Nasdaq Composite: 26.30% Russell 2000: 1.35% Bitcoin (BTC-USD): 62.17% Ether (ETH-USD): 39.17% Stocks to Watch Before U.S.equity markets begin trading today, no market-moving earnings reports are expected.
Gaming stocks, including MGM Resorts ( MGM ), Wynn ( WYNN ) , and others may see some lift from favorable data from the Macau Gaming Inspection and Coordination Bureau.
As the national Golden Week holiday rolls on, the group reported September gross revenue soared 404% YoY to HKD 14.9 billion.At the same time, the Detroit Casino Council announced that members from MGM Grand Detroit, Hollywood at Greektown, and MotorCity casinos voted 99% “yes” to authorize a strike, potentially expanding strike-related headwinds.
Tesla ( TSLA ) rolled out an updated Model Y version in China, with some improved features, although its starting price was left unchanged.With the September quarter now in the rearview, Tesla appears to have missed its expected 3Q 2023 timetable to start deliveries for its Cybertruck.Reports indicate the company may hold a public delivery event sometime in the current quarter.
NIO ( NIO ) delivered 15,641 vehicles in September, up 43.8% YoY but down 19% compared to August.
Microsoft ( MSFT ) CEO Satya Nadella is expected to take the stand today as part of the Justice Department’s antitrust trial against Google ( GOOGL ) .
IPOs
Near-term the calendar for such activity looks rather thin.Readers looking to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page .
After Today’s Market Close
No significant companies are slated to report quarterly results after equities stop trading later today.
Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar .
On the Horizon Tuesday, October 3
US: JOLTS Job Openings Report – August Wednesday, October 4
Japan: Jibun Bank Services PMI (Final) – September Eurozone: HCOB Services PMI (Final) – September Eurozone: Retail Sales, Producer Price Index – August UK: S&P Global/CIPS Services PMI (Final) – September US: ADP Employment Report – September US: S&P Global US Services PMI (Final) – September US: ISM Non-Manufacturing Index – September Thursday, October 5
Germany: Imports/Exports – August Friday, October 6
Japan: Leading Economic Index (Preliminary) – August US: Employment Report – September US: Consumer Credit – August US: Total Vehicle Sales, Used Car Prices – September Thought for the Day “if it costs you your peace, it is too expensive.” ~Paulo Coelho
Disclosures Microsoft (MSFT) is a constituent of the Tematica Research Thematic Dividend All-Stars Index .
