Monday's Brew - Oct 2
Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful today. Dow Jones futures were down slightly in early trading while S&P 500 Index and NASDAQ futures were both up a little. Today's key economic indicators include the 10 AM Institute of Supply Management's poll on manufacturing for September, which is anticipated to drop to 53.7 percent from 54.5 percent last month. PNC Financial Services Group sees the September ISM manufacturing index falling about a point to 54.2.
The market's rise during Q3 may help to make it vulnerable here as we see some of the basis for its rise weakened. We see several factors pressuring stocks today. First, St. Louis Fed President William Poole indicated on Friday that interest rate cuts were not likely on the near-term horizon. A weakened economic growth outlook and housing market concerns had led many investors to anticipate that a Fed rate cut might be around the corner, and this gave lift to the market in Q3. William Poole effectively managed to pull the rug from under that premise on Friday, and in our view, this should deflate the market in the near term.
Oil futures were down a few pennies this morning, as it seems as if a floor may now be in place. Protecting oil, Venezuela is cutting production by 50,000 barrels a day and Nigeria is reducing its output by 5%. There is some concern that OPEC could follow suit if prices continue downward.
The political fallout of the Foley teen email and chat scandal, and concern that important GOP members may have known about it and not acted, threatens the GOP's hold on Congress. This in turn pressures stocks as the perceived market friendly Republicans potentially lose power.
Not all is dire this morning. The tech sector has some good news to celebrate, with worldwide sales of semiconductors reaching an all-time monthly record of $20.5 billion in August, up 10.5 percent from a year ago and 2.1 percent from July, according to the Semiconductor Industry Association. However, Apple Computer was down more than 2% in pre-market trading on a downgrade to hold from buy at Citibank. Online gaming stocks are expected to be pressured today as well, following Congress' passing of a law making it illegal for gaming firms to collect payment from American customers through conventional domestic means.
Overseas, the Nikkei 225 ended with a rise of 0.8 percent. In Europe, the FTSE 100 rose 0.2 percent and the German DAX 30 was flat. Today is Yom Kippur, so trading could be lighter than normal. Also, markets in India, Australia and Hong Kong were closed for holidays today. Happy holidays to our Jewish friends and our friends in Asia and Australia. We hope you enjoyed Today's Morning Coffee. (disclosure)
The market's rise during Q3 may help to make it vulnerable here as we see some of the basis for its rise weakened. We see several factors pressuring stocks today. First, St. Louis Fed President William Poole indicated on Friday that interest rate cuts were not likely on the near-term horizon. A weakened economic growth outlook and housing market concerns had led many investors to anticipate that a Fed rate cut might be around the corner, and this gave lift to the market in Q3. William Poole effectively managed to pull the rug from under that premise on Friday, and in our view, this should deflate the market in the near term.
Oil futures were down a few pennies this morning, as it seems as if a floor may now be in place. Protecting oil, Venezuela is cutting production by 50,000 barrels a day and Nigeria is reducing its output by 5%. There is some concern that OPEC could follow suit if prices continue downward.
The political fallout of the Foley teen email and chat scandal, and concern that important GOP members may have known about it and not acted, threatens the GOP's hold on Congress. This in turn pressures stocks as the perceived market friendly Republicans potentially lose power.
Not all is dire this morning. The tech sector has some good news to celebrate, with worldwide sales of semiconductors reaching an all-time monthly record of $20.5 billion in August, up 10.5 percent from a year ago and 2.1 percent from July, according to the Semiconductor Industry Association. However, Apple Computer was down more than 2% in pre-market trading on a downgrade to hold from buy at Citibank. Online gaming stocks are expected to be pressured today as well, following Congress' passing of a law making it illegal for gaming firms to collect payment from American customers through conventional domestic means.
Overseas, the Nikkei 225 ended with a rise of 0.8 percent. In Europe, the FTSE 100 rose 0.2 percent and the German DAX 30 was flat. Today is Yom Kippur, so trading could be lighter than normal. Also, markets in India, Australia and Hong Kong were closed for holidays today. Happy holidays to our Jewish friends and our friends in Asia and Australia. We hope you enjoyed Today's Morning Coffee. (disclosure)
posted by The Greek | 8:08 AM
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