EmailS&P futures suggest a near flat open. There is little news today and trading volume could be light ahead of the half day of trading tomorrow and the holiday on Wednesday.
Grabbing the headlines today are the now venerated purchasing managers surveys from China and Europe. In China, the august index fell to 48.2 for June from 48.4 in May, according to Markit. In Europe, the index held at an already low 45.1 in June, unchanged from May.
The US ISM index, based on a similar survey of purchasing managers, is due at 10:00 ET and is expected to drop to about 52 for June from 53.3 in May. Apparently, economic growth is stronger in the US than in China, and much stronger than in Europe. Also due at 10:00 ET is construction spending data for May. The ISM index typically has more impact than construction spending.
European stock exchanges are mostly higher, but they still have a bit of catching up to do from late Friday New York gains. The euro is just below 1.26 and oil is down $1.56 at $83.40 a barrel.
Earnings season starts up with Alcoa a week from today. It is impossible to predict whether the focus on Europe will decrease, but earnings reports will certainly grab their share of attention. Expectations are for S&P 500 profits to be up about 8% from the second quarter a year ago, but excluding Bank of America the gain is likely to be just 1% or 2%. Bank of America had a large loss in the second quarter of 2011 and the absence of that large negative this year has a big positive impact on the overall S&P profit change. Most companies will post sluggish earnings numbers.
A flat S&P today is good considering the large gains Friday but the road ahead will continue to be bumpy.
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