Stock futures ticked down Monday after U.S. legislators were able to come to a temporary agreement that staved off a government shutdown. Futures tied to the Dow Jones Industrial Average fell72 points, or 0.2%. S&P 500 futures traded down 0.2%, while Nasdaq-100 futures slipped 0.1%. Dow futures were up more than 100 points earlier in the session. The Senate passed a continuing resolution with just hours to spare before a midnight deadline Saturday, which was then signed by President Joe Biden into law. The bill keeps the government open for 45 more days, an extended period that lawmakers can use to finalize funding legislation. “Investors don’t like to be run to the edge of the cliff constantly,” said Jamie Cox, managing partner at Harris Financial. With “not having a shutdown, we should see a very positive reaction in markets.” Futures gains were limited as investors feared lawmakers were headed for another shutdown fight eventually as Saturday’s agreement did nothing about brewing disagreements on overall government spending levels, the border and Ukraine. “Markets are going to start to discount this being a 2024 event, as opposed to a 2023,” Cox said. “They’re just going to continue to kick the can down the road and push this into an election year.” The looming threat of a government shutdown weighed on investors last week, which also marked the end of the trading month and quarter. Investors feared a shutdown could further weigh on a U.S. economy already seeing slowing growth under the weight of the highest interest rates in 15 years. September marked the worst monthly performance of the year for the S&P 500 and Nasdaq Composite. The broad S&P 500 index finished the month down 4.9% and the quarter 3.7% lower, while the technology-heavy Nasdaq Composite dropped 5.8% in the month and 4.1% in the quarter. The blue-chip Dow ended the month 3.5% lower and the quarter 2.6% in the red. But the indexes are still up on the year despite the pullback, underscoring the strength of the rally seen in the first half of the year. The S&P 500 is down about 6% from its 2023 high close in July, but still up 11% for the year. Investors will watch for economic data due Monday on purchasing and construction spending. Later in the week, attention will turn to a string of reports offering insight into the health of the labor market, including Friday’s all important monthly payrolls data. U.S. Treasury yields climbed on Monday, with the 10-year yield hovering just below the latest 15-year high it hit last week, as investors assessed the outlook for interest rates and awaited fresh economic data. At 8:08 a.m. ET, the yield on the 10-year Treasury was up by more than 6 basis points at 4.633%. It had reached 4.688% on Thursday, its highest level since Oct. 15, 2007. The 2-year Treasury yield was trading at 5.104% after rising by nearly 6 basis points. Asia-Pacific stocks fell even after manufacturing data out of China bounced back to expansion territory. China’s factory activity in September expanded for the first time since April, according to official data over the weekend. China’s PMI climbed to 50.2 in September from 49.7, beating Reuters’ expectations of 50.0. China’s markets are closed for the weeklong Golden Week holiday. South Korean and Hong Kong’s markets are also closed for holidays. Japan’s Nikkei 225 traded 0.31% lower to close at 31,759.88, while the Topix slipped 0.39% to end at 2,314. Sentiment of Japan’s big manufacturers improved to a score of 9 in the third quarter, up from 5 in the previous three months, the closely-watched central bank tankan survey showed. Australia’s S&P/ASX 200 was down 0.22% to end at 7,033.2. Oil prices climbed on Monday after suffering losses at the end of last week, as investors’ focus returned to a tight global supply outlook while a last-minute deal that avoided a U.S. government shutdown restored some risk appetite. Brent December crude futures rose $1.04 to $93.24 a barrel by 1124 GMT after falling 90 cents on Friday. Brent November futures had settled 7 cents lower at $95.31 a barrel at the contract’s expiry on Friday. U.S. West Texas Intermediate crude futures pared gains that had lifted the contract by more than $1 and were last 96 cents higher at $91.75 a barrel after losing 92 cents on Friday. Gold fell 1% on Monday, starting the last quarter of the year languishing near seven-month lows as a stronger U.S. dollar and prospects of interest rates staying higher for longer eroded bullion’s appeal. Spot gold was down 0.7% to $1,835.40 per ounce, its lowest since March 10. U.S. gold futures slipped 0.7% to $1,852.40. The dollar was up 0.2%, holding near a 10-month high against its rivals and making gold more expensive for other currency holders.
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