Budget fight may overshadow data
This week's calendar is full of economic data, though political
events in Washington will likely be the main catalyst.
The United States faces the prospect of a government shutdown tomorrow morning because the Senate is refusing to pass a House-approved budget. House Republicans are trying to use the budget to delay implementation of the Obamacare health law, galvanizing Democratic opposition. At this point a shutdown appears likely, which will almost certainly hurt sentiment. News reports that the situation will end or be extended could trigger buying and selling in the market.
In addition to politics, this week is one of the busiest of the month for important economic data. It begins with Chinese and Japanese manufacturing reports late Sunday night. The Australian central bank follows with its monetary announcement shortly after midnight, which is often viewed as a window into the Chinese economy. Commodity and materials stocks could be especially affected.
The only data release in the United States is the Chicago Purchasing Managers Index at 9:45 a.m. ET. Economists expect a reading of 53.7, up from 53 in August. More Chinese manufacturing numbers follow in the evening.
Tomorrow brings European manufacturing data and the Institute for Supply Management's key index of U.S. manufacturing activity. Construction spending will also be released.
Wednesday features the European Central Bank's interest-rate decision, followed by ADP's private-sector payrolls report for the United States. Oil inventories follow and the Bank of Japan announces monetary policy in the evening.
Thursday brings initial jobless claims, factory orders and ISM's non-manufacturing index. The agenda climaxes Friday morning with non-farm payrolls, typically the most important economic release of the month.
In addition to the economic and political events, companies could preannounce results because as the third quarter ends. Earnings season will gain momentum in coming weeks.