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Futures in Red on Weak China Data

Monday, September 28, 2015

The major indexes are on track to start today's session in the red on weak data out of China. Stocks ended mixed on Friday, after being up earlier in the session on Fed optimism. The S&P 500 and Nasdaq finished modestly in the red and strong gains for Nike ( NKE ) keeping the Dow Jones in the black.

The latest weak reading out of China pertains to profits by industrial companies, which fell -8.8% from the year-earlier level in August, according to data released by China's National Bureau of Statistics. This monthly measure tracks the earnings performance of the country's state-owned and non-state owned firms in the manufacturing, mining, power, water and other sectors of the economy.

A combination of lower sales, higher costs and weak prices as a result of soft demand has been weighing on the sector's earnings power. The pressure is particularly notable in the mining sector, offsetting modest gains elsewhere. China and the Fed have been the market's primary pre-occupations lately, and this report adds to those worries.

On the home front, this morning's Personal Income & Spending numbers came in-line with estimates, with the report's internals modestly on the positive side. On the docket for later this week is the factory sector ISM survey on Thursday and the September non-farm payroll report on Friday. The consensus expectation is for the jobs report to show 203K jobs in September, up from August's 173K tally. The ISM survey is expected to show a modest pullback August's 51.1 level reflecting the sector's exposure to weakness in China and other markets.

Sheraz Mian

Director of Research

Note: In order to get an email alert each time this author publishes a new article, click on the 'Follow Author' link at the bottom of the top-right box of links. In addition to this pre-market open daily article about the market, economy, and the corporate earnings picture, Sheraz also provides detailed earnings analysis in his weekly Earnings Trends and Earnings Preview reports.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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