Morning MoneyBeat: Heavy Week of Data to Drive Markets

       

By Kristen Scholer
        Morning MoneyBeat is the Journal's pre-market primer packed with market updates, insights and must-read news links. To receive this morning newsletter via email, click here: http://on.wsj.com/MoneyBeatUSSignup
        MARKET SNAP: At 6.20 a.m. ET, S&P 500 futures down 0.10%. Treasury yield higher at 2.19%. Nymex down 1.59% to $46.37; gold 0.25% lower at $1092.5/oz. In Europe, FTSE 100 down 0.06%, DAX up 0.59% and CAC up 0.46%. In Asia, Nikkei 225 down 0.18% and Hang Seng down 0.91%.
        WATCH FOR: 8:30 a.m. EDT. June Personal Income and Consumer Spending. [Personal Income expected 0.4% vs. 0.5% in May. Consumer Spending expected 0.2% vs. 0.9% in May.] 10 a.m. EDT. July ISM Manufacturing. [Expected 53.5 vs. 53.5 in June.] 10 a.m. EDT. June Construction Spending. [Expected 0.6% vs. 0.8% in May.] July Light Vehicle Sales. [Expected 17.2 million vs. 17.16 million in June.]
        THE BREAKFAST BRIEFING
        Data should steer the markets this week.
        For a Federal Reserve that has said its decision to raise rates will be data-dependent, it has six more weeks to judge a sense of the recovery from the data before its September meeting. Between now and then, this week will be among the busiest for economic reports.
        The July employment report out Friday is likely to capture the bulk of traders' attention. Consensus among economists surveyed by Dow Jones is that 215,000 payrolls were added last month, roughly in line with the average so far this year of 208,000.
        The central bank said in its latest policy statement last week that not until it sees "some further improvement in the labor market and is reasonably confident" that inflation will move back to its 2% objective over the medium term will it increase short-term borrowing costs.
        "If our July employment report forecast [228,000] is realized, we believe this performance would qualify in the Fed's eyes as 'some' further improvement in the labor market to justify a rate hike in September," said Sam Bullard, senior economist at Wells Fargo Securities.
        In addition to Friday's jobs report, the Fed will get one more read on the labor market at the beginning of September before it decides on rates in the middle of next month.
        This week will offer other crucial data points as well, including reads on personal-consumption expenditures and the manufacturing and services sectors. The Fed's preferred measure of inflation is the personal-consumption expenditures price index that is embedded in June's personal income report out Monday at 8:30 a.m. EDT.
        After rising only 0.1% on a month-over-month basis in May, the personal-consumption expenditures index is projected to nudge higher by the same amount in June. Reads on July manufacturing and services are expected to hold at their same levels from June at 53.5 and 56, respectively.
        For a data-dependent Fed, this week will be key as it's one of the busiest in terms of economic reports between now and the central bank's Sept. 16 meeting.
        Morning MoneyBeat Daily Factoid: Not too long ago, on this day in 1996, "The Macarena" began its 60-week long run on the Billboard Hot 100 Chart.
        - By Kristen Scholer
        STOCKS TO WATCH
        Before the opening bell, Tyson Foods is forecast to post fiscal third-quarter earnings of 92 cents a share, according to analysts polled by FactSet.
        Also ahead of the open, Clorox is expected to report fiscal fourth-quarter earnings of $1.37 a share.
        MUST READS (LINKS)
        Fed's Bullard: 'In Good Shape' to Raise Rates in September: Federal Reserve Bank of St. Louis President James Bullard says economic data seen since central bankers gathered this week are bolstering the case for raising short-term rates when officials meet in September.
        Global Stocks Steady Amid China, Greece Jitters: Global stocks had a cautious start to the week, with investors focusing on disappointing Chinese manufacturing data and the reopening of Greece's equity market after a five-week closure.
        Athex Reopens and Falls Fast. Here's What the Street Thinks: Athens' main stock index reopened after five weeks on Monday and promptly fell close to 23% before recovering some ground. A huge move, but not one that is especially surprising, analysts, investors and strategists said Monday.
        Investors Are Far From Sold on Gold: To understand the stock market, check out the gold market. The two tell a lot about each other. Today, the gold market is giving a clear signal: Investors, on the whole, aren't very frightened.
        HSBC to Sell Brazil Business for $5.2 Billion: HSBC said it plans to sell its Brazil business to Banco Bradesco in an all-cash deal worth $5.2 billion as it reported a fall in its second-quarter net profit.
        5 Takeaways From HSBC's Q2 Earnings: HSBC scaled back its business again Monday with the sale of its Brazilian unit, as the first major step in a new strategy announced in June to cut jobs and pivot its focus back to Asia.
        Tech Firms Beware: Don't Disappoint Investors: Technology companies whose earnings disappoint investors are paying an unusually large toll this quarter, highlighting Wall Street's high expectations for the sector at a time of uneven economic growth.
        Allianz-Led Consortium to Buy Back Tank & Rast: A consortium headed by Allianz's infrastructure arm is set to spend more than $3.84 billion to buy a highway service station chain that it sold for about a third of that sum a decade ago, people familiar with the matter said.
        Spy Software Gets a Second Life on Wall Street: A wave of companies with ties to the intelligence community is winning over the world of finance.
        Chinese Firms Seek Multibillion-Dollar IPOs: Two Chinese financial firms are gearing up for multibillion-dollar initial public offerings in Hong Kong, even as China's stock markets saw one of their steepest selloffs last month.
        (END) Dow Jones Newswires

        August 03, 2015 06:36 ET (10:36 GMT)

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