Slumping global economic growth helped push US stock futures lower Tuesday morning, the Wall Street Journal reported. Futures for the Dow dropped 0.3%, while futures for the S&P 500 and Nasdaq each fell 0.2%. The decline in futures shares does not necessarily mean Wall Street will fall on the day.
Tuesday, October 7, 2014
“There’s concerns that we’re going to have some issues in Europe and that those concerns are going to come over here to the United States,” Kent Engelke, chief economic strategist at Capitol Securities and Management, told the Wall Street Journal.
Investors also await details from the Federal Reserve’s September meeting, to be released Wednesday. Analysts hope the meeting notes will reveal the timing of an interest rate hike, largely believed to take place sometime in 2015.
Weak European data
German production data from the Economy Ministry in Berlin indicated a 4% decline from July to August, marking the biggest drop since January 2009, Bloomberg reported.
“For a region like the euro zone, investors are going to be particularly sensitive to weakness. This is very true ahead of earnings season. We haven’t too many profit warnings and investors are fearing bad news that has shown up in economic indicators will sooner or later have to show up in earnings disappointments,” Gerhard Schwarz, the head of equity strategy at Baader Bank AG in Munich, told Bloomberg.
European stocks slid in response to the disappointing report, which could also have an effect on the US markets.
Market influencers Tuesday
Investors will look to a few events on Tuesday to gauge the market’s activity, according the Market Watch. The US Labor Department will release August job opening and consumer credit data Tuesday afternoon, while the Minneapolis Federal Reserve President will give a speech on monetary policy objectives in Rapid City, South Dakota.
Additionally, some companies are preparing their third-quarter earnings reports. Yum Brands Inc. will release its quarterly earnings after Tuesday’s close. Acloa Inc. is set to release its earnings Wednesday.
Some analysts are confident third quarter earnings will prove strong. Reasons for this include expanding US economic growth, solid growth in the Institute for Supply Management manufacturing index and little cost pressure.
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