- Reuters/China Daily
Here is what you need to know.
Congress has avoided a government shutdown (for now). Congress pieced together a stopgap deal that will keep the government funded through December 11. At some point this fall, Congress will also need to raise the debt ceiling. When these two ordeals occurred near each other in 2013 the government was shut down for 17 days. Also of note, the December Federal Reserve meeting is set for December 16.
Chinese manufacturing improved, but services slipped.China’s manufacturing PMI ticked up to 49.8 in September from 49.7 in August. While the sector remains below the expansion-contraction line of 50, the reading showed the sector deteriorating at a slightly slower pace. Internals of the report showed improvement, with only inventories contracting at a faster pace. As for nonmanufacturing PMI, the report printed 53.4 for a second consecutive month. Chinese markets are closed until October 8.
An insider-trading investigation related to the Fed leak is in the works. The Commodity Futures Trading Commission is investigating whether insider-trading rules were broken when Medley Global Advisors leaked the Fed’s stimulus plans to its clients. Medley says it’s a media company and therefore protected by the First Amendment, which grants freedom to the press.
Eurozone manufacturing disappointed. Manufacturing PMIs across the eurozone were above the expansion-contraction line of 50, but most missed estimates. Germany’s reading slipped to 52.3 from 53.3 and missed the 52.5 that was forecast. Meanwhile, France was the bright spot with a 50.6 print, up from the previous look of 48.3. The eurozone as a whole fell to 52, in line with estimates. The euro is weaker by 0.3% at 1.1148.
GE sold two more businesses. Bloomberg reports that Wells Fargo has agreed to buy most of General Electric’s railcar-leasing business. According to the press release, “The deal will make Wells Fargo’s First Union Rail division the second-largest railcar and locomotive lessor in North America, adding more than 77,000 cars and about 1,000 locomotives to its existing fleet.” The remainder, its tank-car assets and repair facility, was bought by an arm of Berkshire Hathaway. Additionally, GE sold a $3.6 billion real-estate-loan portfolio to Apollo Global Management’s MidCap Financial. GE has sold off about $200 billion worth of assets amid its restructuring to focus on manufacturing.
Walmart is laying off workers. Walmart will lay off hundreds of employees at its corporate headquarters in Arkansas, people familiar with the matter told The Wall Street Journal. According to the report, fewer than 500 workers would lose their jobs after the most recent quarterly report noted higher labor costs. Earlier this month, Walmart said it would hire 60,000 seasonal workers.
Samsung’s TVs may have cheated energy-efficiency tests in Europe. The Guardian reports that independent lab testing shows that some of Samsung’s TVs used less energy during testing than they did in everyday use. Samsung disputes the findings, saying its “motion lighting” feature reduces brightness for several settings like watching movies and sports and is not designed to skirt testing standards. The European Commission says it will investigate the matter.
Stock markets around the world are up. Japan’s Nikkei (+1.9%) paced the advance in Asia, and Spain’s IBEX (+1.6%) leads the advance in Europe. S&P 500 futures are up 12.50 points at 1,921.25 per dollar.
US economic data is heavy. Initial and continuing claims are due out at 8:30 a.m. ET and are followed by both ISM Index and construction spending at 10 a.m. ET. US natural-gas inventories will be released at 10:30 a.m. ET. Lastly, auto and truck sales will cross the wires throughout the day. The US 10-year yield is up 2 basis points at 2.06%.
Earnings flow remains light. McCormick reports ahead of the opening bell, and Micron Technology will release its quarterly results after markets close.