Monday October 10th

U.S. stock markets index futures were flat Monday morning as investors look ahead to key earnings and inflation reports that will shed light on the U.S. economy after a shaky week for markets. Futures connected to the Dow Jones Industrial Average rose 33 points. S&P 500 futures gained 0.01%, while Nasdaq 100 futures fell 0.18%. Shares of Merck rose more than 2% in premarket trading after being upgraded by Guggenheim. Market observers generally consider the week ahead as the kickoff to earnings season, with four of the world’s largest banks – JPMorgan, Wells Fargo, Morgan Stanley and Citi – reporting Friday. PepsiCo, Delta and Domino’s are also among companies reporting next week. Inflation will also take center stage as new monthly Consumer Price Index data comes Thursday morning. Markets whiplashed last week, starting with a relief rally that pushed the S&P 500 up more than 5% in its largest two-day gain since 2020. That rally unwound when jobs data came in stronger than expected, signaling further rate hikes, and OPEC+’s decision to slash oil supply rattled investors. When trading ended Friday, the S&P was up 1.5% on the week. The Dow and Nasdaq were up 1.5% and 0.7%, respectively. Still, the Dow, S&P 500 and Nasdaq had the first positive week in the last four. All remain down substantially so far in 2022, however, and the Nasdaq is less than 1% away from its 52-week low. “The direction of the stock market is likely to be lower because either the economy and corporate profits are going to slow meaningfully or the Fed is going to have to raise rates even higher and keep them higher for longer,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, on Friday. “Given the conditions that we are operating under, we believe it’s prudent to begin preparing for a recession,” he added. Last week brought heightened concerns that corporate earnings will show the ugly side of a surging dollar as Levi Strauss became the latest to cut guidance due to sliding international sales. Shares in the Asia-Pacific fell on Monday, with Hong Kong’s Hang Seng leading losses as Chinese chip stocks listed in the city plunged following new export rules from the U.S. The broader Hang Seng index was 2.95% lower at 17,216.66, with the Hang Seng Tech index down 3.98%. HSI heavyweight Meituan fell 6.71%. In mainland China, the Shanghai Composite lost 1.66% to 2,974.15 on its first day of trade after the Golden Week holiday, while the Shenzhen Component dropped 2.38% to 10,522.12. The CSI 300 index, which tracks the largest mainland-listed stocks, slipped 2.21% to 3,720.94. The S&P/ASX 200 was 1.62% lower at 6,667.80. Markets in Japan, South Korea, Taiwan and Malaysia are closed for holidays Monday. Oil prices fell on Monday, ending five straight days of gains, as investors looked to slowing economic activity in China, the world’s biggest crude importer, which revived concerns about a global recession and falling global fuel demand. Brent crude futures for December settlement fell by as much as 1.1%, and was last down 77 cents, or 0.8%, at $97.15 a barrel by 0645 GMT. West Texas Intermediate crude for November delivery declined by as much as 1.1% and was last at $92 a barrel, down 64 cents, or 0.7%. Gold prices dipped for a fourth straight session on Monday, weighed down by a stronger dollar after healthy U.S. jobs data cemented bets that the Federal Reserve would stick to its aggressive rate hike path. Spot gold was down 0.8% at $1,680.60 per ounce, as of 0857 GMT, after hitting its lowest since Oct. 3. U.S. gold futures fell 1.2% to $1,688.30.