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Top 5 Things to Know in The Market on Monday

Published 2018/11/05, 12:26
Updated 2018/11/05, 12:43
© Reuters.  Top 5 things to know today in financial markets
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Investing.com - Here are the top five things you need to know in financial markets on Monday, November 5:

1. U.S. Futures Drift Lower Ahead of Midterm Elections

U.S. stock futures pointed to a downbeat start to the trading week, with the major indices all drifting lower, as investors kept risk appetite to a minimum ahead of U.S. congressional midterm elections on Tuesday.

Opinion polls show a strong chance that the Democratic Party could win control of the House of Representatives, with President Donald Trump's Republican Party likely to hold the Senate.

At 5:25AM ET (1025GMT), the blue-chip Dow futures were down 53 points, or about 0.2%, the S&P 500 futures declined 5 points, or around 0.2%, while the tech-heavy Nasdaq 100 futures indicated a loss of 4 points, or roughly 0.1%.

Elsewhere, shares in Europe and Asia struggled, as investors remained cautious amid ongoing uncertainty around the U.S.-China trade dispute.

Hopes for an imminent trade agreement between Washington and Beijing have faded after an economic advisor to President Trump said late last week that there were no such plans in the works.

2. Last Big Week of 3Q Earnings Kicks Off

More than 75 companies listed on the S&P 500 are set to report corporate results in what will be the last big week of the third-quarter earnings season.

Monday sees Loews (NYSE:L), SeaWorld (NYSE:SEAS), Sysco (NYSE:SYY), and Diamond Offshore Drilling (NYSE:DO) report ahead of the opening bell.

Booking (NASDAQ:BKNG), Marriott (NASDAQ:MAR), Avis (NASDAQ:CAR), Mylan (NASDAQ:MYL), Mosaic (NYSE:MOS), Cabot Oil & Gas (NYSE:COG), and Occidental Petroleum (NYSE:OXY) are due after the bell.

Other notable companies set to report this week include, Disney (NYSE:DIS), Square (NYSE:SQ), Qualcomm (NASDAQ:QCOM), CVS Health (NYSE:CVS), Etsy (NASDAQ:ETSY), Eli Lilly (NYSE:LLY), Ralph Lauren (NYSE:RL), Match Group (NASDAQ:MTCH), Papa John's (NASDAQ:PZZA), Wynn Resorts (NASDAQ:WYNN), Roku (NASDAQ:ROKU), Michael Kors (NYSE:KORS), TripAdvisor (NASDAQ:TRIP), Humana (NYSE:HUM), and Twenty-First Century Fox (NASDAQ:FOX).

3. Service Sector Data Ahead

On the data front, the market’s attention will shift to the U.S. service sector with the October read on service sector activity from Markit Economics as well as the Institute for Supply Management’s gauge on non-manufacturing economic activity both on the agenda.

The reports are due at 9:45AM ET (1445GMT) and 10AM (1500GMT) respectively.

Global financial markets will also focus on this week's Federal Reserve meeting. While no change in policy is expected, economists believe October's strong labor market data could see the U.S. central bank signal an increase in December.

In the currencies, the dollar was little changed against a currency basket, while the British pound jumped to a two-week high following a newspaper report that a Brexit agreement was imminent.

Elsewhere, in the bond market, U.S. Treasury prices held steady, with the benchmark 10-year yield standing at around 3.20%.

4. Oil Market on Alert as Iranian Sanctions Kick In

In commodities, oil prices will be closely watched as the U.S. reimposed oil and financial sanctions against Iran, ratcheting up the pressure on Tehran to curb its nuclear, missile and regional activities.

The move will restore U.S. sanctions that were lifted under a 2015 nuclear deal negotiated by the administration of President Barack Obama, and add 300 new designations in Iran's oil, shipping, insurance and banking sectors.

Details of the sanctions will be released at a news conference scheduled for 8:30AM ET (1330 GMT) with Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin.

China, India, South Korea, Japan and Turkey - all top importers of Iranian oil - are among eight countries expected to be given temporary exemptions from the sanctions to ensure crude oil prices are not destabilized.

Oil prices fell on the back of that news as investors remained concerned about oversupply in the market. U.S. crude traded down 0.5% at $62.80 a barrel, the lowest since April 9, while global benchmark Brent dipped 0.3% to $72.62.

5. China's Xi Talks Up Commitment To 'Free Trade'

Chinese President Xi Jinping promised to lower tariffs, broaden market access and import more from overseas at the start of a trade expo designed to demonstrate goodwill amid mounting frictions with the U.S.

The Nov. 5-10 China International Import Expo, or CIIE, brings thousands of foreign companies together with Chinese buyers in a bid to demonstrate the importing potential of the world's second-biggest economy.

In a speech that largely echoed previous promises, Xi pledged China would accelerate opening of the education, telecommunications and cultural sectors, while protecting foreign companies' interests and punishing violations of intellectual property rights.

He said that the expo showed China's desire to support global free trade, adding - without mentioning the U.S. - that countries must oppose protectionism.

U.S. President Donald Trump has railed against China for what he sees as intellectual property theft, entry barriers to U.S. business and a gaping trade deficit.

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