S&P 500 futures have been slowly trending lower all morning, but they just took a sharp turn downward and are now negative.
Right now, futures are trading at 1752, down 0.1% from Friday’s close and 10 points off the overnight highs.
Gold, oil, and 10-year U.S. Treasury futures are all down slightly as well.
The dollar is up marginally against both the euro and the yen.
At 9:15 a.m. ET, September industrial production data are released. At 10 a.m., we get September pending home sales, and at 10:30 a.m., the Dallas Fed’s October manufacturing activity survey.
This week is the last major week of third quarter earnings reporting season.
“27% of equity cap, 126 companies, is set to report,” says Goldman Sachs strategist Amanda Sneider. “Half of Energy and Utilities market cap will announce results next week. 30% of the Health Care, Materials, and Info Tech sectors will also report.”
Sneider outlines the three biggest takeaways from Q3 earnings reporting so far in a note to clients: “(1) 3Q earnings positively surprise, driven by Financials and higher than expected margins; (2) Revenues have been in line with expectations and trailing four-quarter margins remain stable despite positive surprises in 3Q; (3) Negative revisions to 4Q EPS estimates.”
In a separate note, Goldman Sachs chief U.S. equity strategist David Kostin said the three questions dominating his discussions with clients about the stock market over the past week were “(1) the forward path of the US equity market; (2) prospective return of the S&P 500 compared with other global stock markets; and (3) investment strategies through year-end after a stellar 22% rally during the first 10 months of 2013.”
On the first question, Kostin says the debate among Goldman clients can be characterised in three words: “Fama vs. Shiller” (the names of two economists who won this year’s Nobel Prize in economics). Read more here »
The chart below shows the drop in S&P 500 futures.