US Markets

Wall Street jittery ahead of bumper earnings week


U.S. stock index futures indicated a flat to mildly lower open on Monday as traders prepare for the Federal Reserve's two-day meeting this week and a slew of corporate earnings.

150 S&P 500 Index companies are due to report this week — including behemoths Apple and Exxon Mobil. Major earnings on Monday include Xerox before market open and Luxottica expected later in the day. Cheesecake Factory, Novocure, Rent-A-Center, Everest Re, Broadcom, Hartford Financial are all due to report after the bell.

Xerox reported earnings that topped estimates but revenue missed. The office solutions company's results were hurt by lower printer sales and a strong dollar, and said it would conduct a review of its business operations.

Traders work on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters

Key data releases on Monday include new home sales at 10:00 a.m. ET for September and the Dallas Federal Reserve Survey due at 10:30 a.m.

As for the Fed, it could tweak its language slightly when it releases its post-meeting statement Wednesday.

Many economists now expect a December rate hike if the economy does not slow significantly.

"Markets are hoping for the Fed to do nothing on Wednesday (as usual) and for the Bank of Japan to ease on Friday. The mood is risk-friendly. I'm, still surprised at the strength of the reaction to the ECB's nods and winks but more fool me," said Kit Juckes, global strategist at Societe Generale.

Throughout the week the flow of earnings news will also pick up with reports from Big Oil, like Exxon Mobil and Chevron, and drugmakers, Merck, Pfizer and Bristol-Myers.

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Apart from corporate releases, the first look at third-quarter GDP (gross domestic product) is on Thursday, and economists are looking for growth of about 1.7 percent. Other key data include durable goods Tuesday, and the employment cost index and personal income and spending Friday.

In Europe, equities traded mixed after China's central bank made a surprise rate cut Friday, following hints of further stimulus from the European Central Bank (ECB) on Thursday.

The People's Bank of China (PBOC) lowered its benchmark interest rates by 25 basis points on Friday, alongside a half-percentage cut in the reserve requirement ratio (RRR), in a bid to jumpstart a slowing economy. Friday's moves marked the sixth time since November that the PBOC has cut interest rates.

Share markets in China ended Monday on a positive note, with the key Shanghai Composite index closing up 0.5 percent.