Wall Street appears in the green in the first indicative trend before the market this Monday. The S&P 500 gained 0.4%, the Dow Jones 0.3% and the Nasdaq 0.5%. The main reason for satisfaction comes from the weekend announcements. Indeed, the American Congress therefore adopted on Saturday evening a very provisional financing bill making it possible to avoid the partial closure of federal administrations, in other words the famous ‘shutdown’, which could have weighed on the economy depending on its duration. The Senate, with a Democratic majority, approved the draft provisional budget by 88 votes to 9, sending the text to Joe Biden for ratification on Saturday. The House of Representatives had earlier adopted this text. The latter offers respite with funding from American federal administrations until November 17. The House validated the text by 355 votes to 91. The text excludes an aid package for Ukraine, but Biden confirmed this weekend his support for the country attacked by Russia.
A ‘government shutdown’ was narrowly averted before the October 1 deadline after House Speaker McCarthy introduced a bill approved on a bipartisan basis in the House and Senate before being signed by President Biden on Saturday evening. The bill will keep the government funded for 45 days until mid-November. That bill passed without additional funding for Ukraine, which members of both parties said would be addressed in the coming weeks. Although the shutdown was expected to begin this weekend, the deal is unlikely to have much of an impact on markets. In recent days, economists have noted that any drag on economic growth from a shutdown would be recovered later, while previous shutdowns that did not include a potential breach of the debt ceiling had little impact on the S&P 500 or rates. An agreement also means that government economic data will continue without interruption, in other words that government statistics will be published as normal.
On the economic front precisely, this week on Wall Street, operators will be monitoring this Monday the final manufacturing PMI index and the manufacturing ISM, as well as construction spending. The US Department of Labor’s JOLTS report on job openings will be released tomorrow. ADP’s report on private non-agricultural employment, the final composite PMI, industrial orders, ISM services and the weekly report on domestic oil stocks will be released on Wednesday. The balance of international trade in goods and services, unemployment claims, as well as the Challenger study on announcements of job losses, will be revealed on Thursday. The monthly government report on the employment situation and consumer credit figures will be released on Friday.
Fears of a monetary policy error or a hard landing still weigh on the markets, with many expecting a further tightening of financial conditions while the Fed and other central banks mostly maintain their positions restrictive. The surge in crude oil prices also plays a role in concerns about persistent inflation which fuels prospects of further tightening.
Elsewhere in the world, economic news is marked by the manufacturing PMI indices. Asian indicators were mixed in China and Japan. The euro zone’s final manufacturing PMI index was unchanged from the flash, at its lowest in two months at 43.4. UK house price data shows prices changed little in September. Over one year, they declined by 5.3%.
In corporate news on Wall Street, McCormick and Cal-Maine Foods are releasing their quarterly financial results tomorrow, Tuesday. RPM International, Acuity Brands and Tilray announce Wednesday. Constellation Brands, Lamb Weston Holdings, ConAgra and Levi Strauss will be there on Thursday.
This article is originally published on boursier.com