U.S. stocks: Futures fall as global data disappoints; consumer prices loom
Madrid-Spain (Nov 20) Stock futures fell Thursday after a batch of weak economic indicators from Europe and China, with the U.S. also set for a big day of data on manufacturing, consumer prices and existing-home sales.
“The market is consolidating at the higher end of this range, which is obviously at records, but basically it’s pretty good considering the runup we’ve had,” said Peter Cardillo, chief market economist at Rockwell Global Capital.
Futures for the Dow Jones Industrial Average DJZ4, -0.36% dropped 71 points, or 0.4%, to 17,586, while those for the S&P 500 SPZ4, -0.40% fell 9.6 points, or 0.5%, to 2,039.90. Futures for the Nasdaq-100 index NDZ4, -0.49% slid nearly 20 points, or 0.5%, to 4,204.25.
Markit reported that the flash November reading for the composite purchasing managers index in the eurozone dropped to 51.4, its lowest level in 16 months. After the release, European stocks SXXP, -0.69% tumbled, as did the euro EURUSD, -0.11% versus the dollar.
The data confirms that the eurozone is still in rough shape. Germany’s own November preliminary manufacturing survey came in at 50.0, versus an expected 51.5. Stock futures were also dealing with weakness in a similar gauge out of China, which showed factory activity declined in November, after gaining in the prior month. PMI data out of Japan was also weak.
Economists are eager to view the Fed's minutes of the Oct. 28-29 meeting to see whether some officials were more concerned than the statement suggested. Greg Robb joins MoneyBeat.
The S&P 500 index SPX, -0.15% snapped a four-day run on Wednesday, closing 3.1 points to 2,048.72, while the Dow industrials DJIA, -0.01% ended down a couple of points, but still managed its second-highest close in history at 17,685.73. The Federal Reserve minutes revealed scant detail about the central bank’s policy plans.
Goldman’s call for S&P 500 and data on tap: The investment bank said in its equity outlook for 2015 that the S&P 500 should rise to 2,100 by the end of that year, making for a “modest” 5% total return. It added that the market reaction to the first Federal Reserve rate hike in six years should be “benign.”
But Goldman also said 2015 will be challenging for active equity managers, with low volatility continuing to be a theme. The S&P 500 will rise to 2,150 by mid-year, but then slip during the second half, it forecast.
At 8:30 a.m. Eastern Time, readings on weekly jobless claims and October consumer prices are out. Plunging gasoline costs are expected to trigger a 0.1% drop in the CPI index, said economists polled by MarketWatch. Read data preview
At 10 a.m. Eastern Time, the Philadelphia Fed’s survey of manufacturers for November should offer evidence on whether a weaker global economy is dampening exports. At the same time, existing-home sales for October will be released, as will leading indicators for that month.
Cardillo said the data will probably continue to point to an expanding economy, “so any pullback [in stocks] is just a normal process of consolidation phase,” he said.
Source: MarketWatch
