U.S. stocks poised for soft start after IMF cuts growth forecast
Published: July 24, 2017 5:41 a.m. ET
Google parent Alphabet, Halliburton to report
Wall Street stocks looked set for a lower open on Monday, with futures easing after the International Monetary Fund lowered U.S. growth forecasts and investors continued to fret about whether President Donald Trump can push through his plans to stimulate the economy.
This week’s packed earnings reports schedule starts with Halliburton Co. and Alphabet Inc. on Monday, while a meeting of the Organization of the Petroleum Exporting Countries is also in the spotlight.
Dow Jones Industrial Average futures YMU7, -0.07% dipped 27 points, or 0.1%, to 21,491, while S&P 500 futures ESU7, -0.12% edged down 4 points, or 0.2%, to 2,465. Nasdaq-100 NQU7, -0.09% eased 11.5 points, or 0.2%, to 5,907.75.
Stocks finished lower on Friday. For the week, the DJIA DJIA, -0.15% dipped 0.3%, but the S&P 500 SPX, -0.04% and Nasdaq Composite Index COMP, -0.04% posted gains of 0.5% and 1.2%, respectively.
While the earnings season is far from finished, politics could move into the forefront for investors on Monday.
U.S. President Donald Trump will make a statement on health care at 3:15 p.m. Eastern, according to media reports. Republicans were forced to shelve a bill to repeal and replace Obamacare simultaneously last week due to lack of support. Trump warned GOP lawmakers in a post to Twitter late Sunday that they needed to support his efforts on the health care front:
If Republicans don't Repeal and Replace the disastrous ObamaCare, the repercussions will be far greater than any of them understand! — Donald J. Trump (@realDonaldTrump) July 24, 2017
But Trump’s inability to get his party’s health care plans pushed through so far have cast doubt on his larger plans over tax reforms, which investors are counting on to support economic growth and keep stocks moving higher.
Also not helping appetite for riskier assets such as stocks, the International Monetary Fund lowered its U.S. economic growth forecasts for 2017 and 2018, blaming less-expansionary-than-expected fiscal policy.
The Federal Open Market Committee will meet this week, though most aren’t expecting a policy move from Federal Reserve members.
In a fairly busy week for data, the Markit manufacturing and services flash Purchasing Managers Indexes for July will be released at 9 a.m. Eastern Time, and existing-home sales for June is due at 10 a.m. Eastern.
OPEC in the spotlight: Oil prices CLU7, +0.87% drifted lower as investors kept a close eye on an Organization of the Petroleum Exporting Countries meeting. Many are hoping the cartel will make a decision to include Nigeria and Libya in its production-cap deal.
The influential Saudi Arabia oil minister, Khalid Al-Falih, said that deeper production cuts were not among the items discussed at the meeting, according to reports on Twitter. He also said that compliance with quotas agreed in the OPEC-led output cap deal was strong, but that some countries continued to lag, reports said.
Stocks to watch: On the earnings docket, Stanley Black & Decker SWK, +0.09% , Hasbro Inc. HAS, +0.91% , VFC Corp. VFC, +1.63% , Halliburton HAL, -2.20% and Arconic Inc. ARNC, +1.86% will report ahead of the open on Monday.
After the close, Google Inc. parent Alphabet GOOGL, +0.17% is due to report.
Shares of WebMD Health Corp. WBMD, +18.68% could be active after a report that KKR & Co. could be near a deal to buy the health-information provider. The deal could be announced as soon as Monday, The Wall Street Journal reported, citing sources.
Other markets: The dollar attempted to gain a footing on Monday, with the ICE U.S. Dollar Index DXY, +0.01% rising to 93.99 from 93.85. The dollar has sagged on sluggish U.S. economic data, dropping 1.4% last week.
Dollar weakness dragged stocks in Japan NIK, -0.62% and Australia XJO, -0.61% lower on Monday, as currencies in those countries gained against the greenback. European stocks SXXP, -0.40% pulled back as auto makers and oil producers struggled.
Gold prices GCQ7, +0.14% inched up $1.40 to $1,256.10 an ounce.
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