Job Openings Survey Coming, Powell Comment

Investing.com — U.S. futures edged lower ahead of a slew of key economic data this week, with jobs and manufacturing numbers dominating Tuesday’s agenda. Markets also digested comments from Federal Reserve Chairman Jerome Powell, who suggested the central bank was in no rush to cut interest rates.

1. Floods show below

U.S. stock futures edged lower on Tuesday as investors begin the final quarter of the calendar year awaiting a slew of economic data and weighing comments from Federal Reserve Chairman Jerome Powell.

By 03:28 ET (0728 GMT), the contract was down 112 points, or 0.3 percent, down 11 points, or 0.2 percent, and down 34 points, or 0.2 percent.

On Monday, the benchmark index closed at a new record high, rebounding from a temporary dip prompted by Powell’s statement that the Fed was in no rush to launch more interest rate cuts after a jumbo 50 basis point cut last month (May more below).

Meanwhile, 30-stock stocks also hit a new all-time high, with technology gaining 70 points or 0.4%. All three of Wall Street’s main averages advanced in both September and the third quarter.

“(T)here was a lot of news on Monday, (…) although the overall narrative didn’t change much and activity was fairly subdued as investors prepare for key economic data from October in the coming days,” analysts at Vital Knowledge said in a note to clients.

2. Open positions, ISM manufacturing PMI ahead

Traders are bracing for the first batch of fresh U.S. economic data this week, which could provide a glimpse into the state of the world’s largest economy and influence how the Fed approaches more potential interest rate cuts this year.

On Tuesday, the closely watched JOLTS report is expected to show there were 7.640 million jobs available in August.

The mark would be slightly lower than in July, when U.S. job openings fell to a three-and-a-half-year low of 7.673 million. The reading, a measure of job demand, and other numbers showing that hiring rose and layoffs remained relatively light, pointed to an orderly easing of the labor market.

Elsewhere, investors will also look to the September reading of the Institute for Supply Management’s services and manufacturing purchasing managers’ indices this week for further signals on the momentum of the US economy.

The ISM manufacturing PMI, due out on Tuesday, is seen at 47.6, up from 47.2 in August, but still below the 50-point threshold that separates contraction from expansion. The October 3 non-manufacturing PMI edged up to 51.6 from 51.5 the previous month.

Analysts at Bank of America predicted in a recent note that the data would suggest that broader U.S. economic activity is “cooling, not collapsing.”

3. Powell says Fed officials are in no rush to cut rates further

Fed Chairman Jerome Powell signaled on Monday that the Fed would likely opt for traditional quarter-point interest rate cuts, but stressed that the future path of borrowing costs is not on a predetermined course.

Powell added that the rate-setting Federal Open Market Committee was in no rush to cut rates quickly, despite announcing a huge cut at its Sept. 17-18 meeting.

He defended the decision, saying it reflected the FOMC’s “growing confidence that, with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate economic growth and inflation that is sustainably shrinking to 2% .

Powell also argued that the overall economy remains in “solid shape” and vowed to “use our tools to keep it there.” He told the Tennessee crowd that “two more cuts” — totaling half a percentage point — would be warranted by the end of 2024 “if the economy performs as expected.”

4. 23andMe CEO No Longer Open to Third-Party Takeover Offers – Filing

23andMe (NASDAQ: ) CEO Anne Wojcicki has ruled out the possibility that the DNA testing group will no longer be open to third-party takeover offers, according to a regulatory filing on Monday.

Instead, Wojcicki said she believes the “best way forward” for the company would be for her to take it private.

The statement comes after all seven independent directors on 23andMe’s board resigned last month over a stalled leadership takeover bid by Wojcicki earlier this year.

Wojcicki’s offer would have taken the firm private and seen it acquire all the shares it does not own at a price of $0.40 per share. Wojcicki had said she would be open to considering outside offers while the deal was being evaluated.

5. Oil the edges down

Oil prices fell on Tuesday as worries about tepid demand growth offset concerns that rising tensions in the Middle East could hurt global supply.

By 03:25 ET, the contract was down 0.8% at $71.13 a barrel, while WTI futures traded 0.9% lower at $67.59 a barrel .

Israel said early Tuesday that its troops had begun “limited” raids against Hezbollah targets in Lebanon’s border area, a move that risks escalating a conflict in the oil-rich Middle East that threatens to embarrass the US and Iran.

Brent ended September down 9%, its third month of declines and its biggest monthly decline since November 2022. It also fell 17% in the third quarter for its biggest quarterly loss in a year. WTI fell 7% last month and is down 16% for the quarter.