24 Oct

Dow Jones Futures Are Flat: Watch Out for Data!

WRITTEN BY Mohit Oberoi, CFA
  • Dow Jones Futures are pointing to a flat opening for the day. The index closed almost flat on Wednesday.
  • Along with the earnings, the flash PMI data and other economic data releases might impact markets today. Notably, US equity market indices including the Dow Jones Index and the S&P 500 are hovering near their all-time highs. However, as we have seen in the past, markets tend to get jittery near the all-time highs.

Dow Jones futures 

Dow Jones futures (DIA) are pointing to a flat opening today. The index closed almost flat on Wednesday. Boeing (BA) and Caterpillar (CAT), both part of the Dow Jones Industrial Average, missed their earnings estimates. However, the stocks closed with gains. Intel (INTC), Visa (V), 3M Company (MMM), and Dow (DOW) are scheduled to release their earnings today.

Since we’re in the middle of earnings season, investors will pay close attention to the earnings. However, we have several key data points that could impact US market indices like the Dow Jones Index today.

PMI data

The October flash PMI data were released today. While Europe’s PMI data is out, the US flash PMI data will be released soon. Europe’s October IHS/Markit flash composite PMI came in at 50.2 and missed the estimates. While the reading improved slightly compared to the previous month, it’s still near the danger level of 50. Notably, readings below 50 indicate a contraction.

PMI data and the Dow Jones Index

While Dow Jones futures are pointing to a flat opening, investors need to watch out for US PMI data. Earlier this month, the ISM manufacturing data spooked investors. The US September manufacturing PMI fell to multiyear lows. The Dow Jones index also cracked following the data release. While the Dow Jones index has risen sharply this year and is near its all-time highs, it’s getting jittery near those levels. Since the beginning of 2018, we’ve seen US markets hit an all-time high and then retreat from those levels. President Trump’s trade war has dragged down US markets.

Is it the economy?

The risk has somewhat subsided due to positive progress in the US-China trade talks. As James Carville said during Bill Clinton’s 1992 campaign, “It’s the economy, stupid.” Today’s PMI data highlighted the weakness in the global economy. Along with the PMI data, we’ll also get more US economic data. The data include US new home sales, durable goods orders, and weekly jobless claims. Watch out for the Dow Jones Index today amid these data releases.

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