Market Snapshot: U.S. stocks set to start September strong as manufacturing data comes on the radar


U.S. stocks are heading for a positive start to September after eking out the seventh straight months of gains in August, as investor attention remains focused on Friday’s jobs report while manufacturing data is set to roll in in the interim.

What are major indexes doing?
  • Dow industrials futures

    rose more than 100 points, or 0.3%, to 35,453
  • S&P 500 futures

    gained 0.3% to 4,534
  • Nasdaq 100 futures

    rose 0.2% to 15,614

On Tuesday, the Dow Jones Industrial Average

fell 39 points, or 0.1%, to 35,360, in line with the S&P 500
which fell 0.1% to 4,522.68 and the Nasdaq
which closed just below flat at 15,259.24.

What’s driving the market?

“It might be the start of September today, but investors will be grappling with a number of familiar themes this morning,” said Jim Reid, a strategist at Deutsche Bank, pointing to the debate over inflation and when central banks will end pandemic-era monetary policy.

The main event for this week remains Friday’s U.S. jobs report. Federal Reserve chair Jerome Powell has indicated that the central bank would be keeping an eye on employment data as it decides when to begin slowing pandemic-era monthly asset purchases, which add liquidity to markets.

The trading session in Asia was met with weak data, as China’s Caixin Manufacturing purchasing managers index (PMI) for August confirmed Tuesday’s official figures to show that Chinese factory activity contracted last month. Data from seven Southeast Asian countries in the ASEAN bloc also showed that manufacturing activity contracted for the first time since May 2020.

“That rounds out a grim week for China’s PMIs as Covid-19 lockdowns and the same supply chain challenges the rest of the world is experiencing erode economic performance,” said Jeffrey Halley, an analyst at broker OANDA.

Early trading in Europe was met with data in the form of the IHS Markit manufacturing PMI for last month, showing that industrial growth remained strong but felt a pinch from pandemic-linked supply chain issues and the availability of parts. The August PMI came in at 61.4, down from 62.8 in July.

On the U.S. economic front, the ADP employment report for August represents the opening act before Friday’s headliner jobs report. That will be released alongside the ISM manufacturing index and motor vehicle sales figures for last month, as well as construction spending for July.

The OPEC+ group of oil producing countries, including Russia and Saudi Arabia, are will meet on Wednesday to discuss output.

“The scheduled 400,000 barrel per day increase is well priced into markets,” said Halley. “Only a significant deviation from that would spark volatility.”

In terms of corporate earnings, Campbell Soup

will share the spotlight with ChargePoint
and Asana
among other companies.

How are other markets faring?
  • In Asia, Tokyo’s Nikkei 225

    surged 1.3%, while the Hong Kong Hang Seng Index

    lifted 0.6% and the Shanghai Composite

    rose 0.7%.
  • Chinese technology stocks

    and Tencent

    were standouts in Asian trading, helping the Hang Seng Tech Index

    outperform and rise 1.3%.
  • London’s FTSE 100

    was 0.9% higher, while the pan-European Stoxx 600

    increased 0.7%; in Paris, the CAC 40

    ticked up 1% and Frankfurt’s DAX

    moved 0.5% into the green.
  • Oil prices were marginally higher, with international benchmark Brent

    crude ticking up near 0.5%, approaching $72 a barrel.

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