Monday October 5th

5-10-2015

Wall Street eyes earnings

U.S. stock index futures pointed to a higher open on Monday, ahead of third-quarter earnings season and key economic data, following the weaker-than-expected jobs report on Friday that cheered markets that a U.S. Federal Reserve interest rate hike now looks less likely. Traders will be on the lookout in the week ahead for any signs of overseas weakness seeping into the U.S. economy, after surprisingly soft job growth in August and September. Dow Jones futures briefly gained more than 100 points while Nasdaq and S&P 500 futures were last up 20 points and 11 points, respectively. On the data front, the ISM non-manufacturing index is due at 10:00 a.m. ET Monday. Investors will also be keeping an eye out for weekly jobless claims and Federal Reserve minutes on Thursday. The markets will also be looking to the start of the third-quarter earnings season, with Pepsico, Alcoa and a few other companies reporting in the week ahead. Earnings are expected to decline 3.9 percent for the S&P 500, according to Thomson Reuters. In Europe, stocks were sharply higher after the weaker-than-expected jobs report, with major indices rallying in excess of 2 percent. U.S. stocks closed more than 1 percent higher Friday, recovering from an initial decline of more than 1.5 percent, as investors digested higher oil prices and the soft jobs report. The Dow and S&P 500 closed up more than 1 percent for their biggest intraday upside reversal since October 4, 2011. Few analysts could find any positives in the September jobs report, which showed the U.S. economy created 142,000 jobs, a number far below the expected 203,000. August and July figures were also revised lower. Unemployment held at 5.1 percent, according to the Labor Department. The participation rate plunged to 62.4 percent, meaning the Fed may not be able to raise rates this year, which would remove some uncertainty for investors. Reporting earnings on Monday is The Container Store, due after the bell. Earnings season kicks off in earnest later in the week. Asian equities kicked off the trading week on a positive note after a weak U.S. employment report on Friday cooled expectations that the Federal Reserve will start raising interest rates soon. Markets in China remain closed until Wednesday for National Day holidays. Nikkei up 1.6%. Japan's benchmark Nikkei jumped to a more than two-week high above the key 18,000 level, rebounding after posting a 1 percent loss for the week ending Friday. Oil rose on Monday after Russia said it was ready to meet other producers to discuss the market, where prices have more than halved from last year's highs due to a supply glut. A report showing a fifth weekly fall in the number of oil rigs drilling in the United States also underpinned prices. Brent was 65 cents higher at $48.78 a barrel by 8:34 a.m. EDT (1234 GMT) after ending up 44 cents on Friday. U.S. crude was 52 cents higher at $46.06 a barrel after settling up 80 cents. Gold slipped on Monday as investors turned to riskier assets, but a flat dollar after a disappointing U.S. jobs report pushed back expectations of a Federal Reserve rate rise to early 2016, helped limit the downside. Spot gold eased 0.1 percent to $1,136.06 an ounce. U.S. futures for December delivery were mostly flat around $1,135.