October is off to a quiet start for US equities with US index futures trading flat to down 0.25%. European bourses, meanwhile are climbing today with the Dax up 0.5% and the FTSE up 0.6%.
Europe’s market party appears to be in response to Manufacturing PMI reports which came in even with or better than analyst expectations. North American Manufacturing PMI reports are due this morning, including Canada (previous 49.5) at 9:30 am EDT, and US ISM (street 47.5) at 10:00 am. US Construction Spending (street 0.1%) is also due at 10:00 am followed by US Auto Sales this afternoon.
US market sentiment appears to be getting impacted by a number of factors. First, a major port strike started overnight with the potential to add to a series of recent disruptions to the US economy which include damage from Hurricane Helene and wireless service outages.
It is a rare day in currency market where the US Dollar and Gold, natural enemies of each other, are both rallying. Gold is up 0.6% likely in response to political and economic uncertainty. The US Dollar, meanwhile, is up, particularly against the Euro and Pound in response to comments from Fed Chair Powell that future rate cuts are more likely to follow a part of 0.25% a meeting, with larger cuts of 0.50% or more being less likely. Four more Fed officials are scheduled to speak today.
Commodity action is also mixed today. US Crude Oil is down 1.0% ahead of this week’s OPEC+ meeting with traders concerned about whether the group will remain united or if Saudi Arabia is ready to break ranks and increase production as had been widely rumoured and reported last month. Copper, meanwhile, is up 0.6%. Platinum is up 1.1% ahead of auto sales. Natural Gas is down 2.4%.