Here are the most important news, trends and analysis that investors need to start their trading day:
Wall Street set to start the week lower after Friday’s rallyWTI tops $83 per barrel; bond yields move higherChina GDP disappoints, third-quarter growth slows to 4.9%Bitcoin inches toward all-time highs on bitcoin ETF optimismApple likely to finish transforming its MacBook lineup
1. Wall Street set to start the week lower after Friday’s rally
Traders work on the floor of the New York Stock Exchange (NYSE) on October 15, 2021 in New York City.
Spencer Platt | Getty Images
Dow futures dropped more than 150 points Monday ahead of a busy week for corporate earnings against the backdrop of increasing U.S. oil prices and a tick-up in bond yields. Dow component Disney also pressured the broader market, losing more than 2% in the premarket after Barclays downgraded the stock to equal weight from overweight, citing concerns about a significant slowdown in growth for the Disney+ streaming service. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq rallied Friday and for all of last week.
The flood of earnings takes a pause Monday but picks back up Tuesday with Netflix, Johnson & Johnson, United Airlines and Procter & Gamble reporting.So far, 41 S&P 500 companies have delivered third-quarter results, with 80% of them topping EPS expectations, according to data from FactSet.Taking into account those already out and estimates for the rest, third-quarter profit growth would total 30%, the third-highest quarterly profit growth rate for S&P 500 firms since 2010.The Dow was less than 1% from its Aug. 16 record close. The S&P 500 was nearly 1.5% away from its Sept. 2 record close. The Nasdaq was 3.1% from its Sept. 7 record close.
2. WTI tops $83 per barrel; bond yields move higher
U.S. oil prices, as measured by West Texas Intermediate crude, jumped another 1%, topping $83 per barrel, their highest level since October 2014. Behind the march higher are continued recovering demand as Covid-depressed business activity picks up, and as high natural gas and coal prices encourage a switch to fuel oil and diesel for power generation. WTI was already up three straight sessions and surged 3.7% last week for its eighth positive week in a row, the best weekly winning streak May 2015.
The 10-year Treasury yield started the week moving back up toward 1.62%. Before topping those levels earlier this month, the last time it was that high was in June. The 10-year yield, which moves inversely to price, was boosted Friday after data showed that U.S. retail sales rose by 0.7% in September, versus an expected decline of 0.2%. Industrial production figures for September are out at 9:15 a.m. ET, with estimates calling for a 0.2% increase following a 0.4% jump in August.
3. China GDP disappoints, third-quarter growth slows to 4.9%
China’s third-quarter gross domestic product grew a disappointing 4.9% from a year ago as industrial activity in the world’s second-largest economy rose less than expected in September.
Many factories had to stop production in late September as a surge in the price of coal and a shortage of electricity prompted local authorities to abruptly cut off power. The struggles of giant developer China Evergrande came to the forefront in August. Real estate and related industries account for about a quarter of China’s GDP, according to Moody’s estimates.
4. Bitcoin inches toward all-time highs on bitcoin ETF optimism
Bitcoin on display.
Chesnot | Getty Images
Bitcoin crept close to its April all-time highs near $65,000, rising about 1.5% on Monday to more than $61,000. The world’s biggest digital currency hit a six-month high above $60,000 on Friday. Traders are optimistic the SEC won’t stand in the way of the first bitcoin futures exchange-traded fund, which would begin trading Tuesday unless regulators stepped in. Approval of an ETF that gives mainstream investors exposure to bitcoin would be a landmark for the crypto industry. After April’s record, bitcoin, known for its volatility, slumped and even traded below $29,000 in June before recovering.
5. Apple likely to finish transforming its MacBook lineup
2020 MacBook Air with M1 chip
Todd Haselton | CNBC
Apple is holding a launch event Monday to announce new products, likely including a redesigned MacBook Pro. The company has a chance to drive continued momentum to its Macs ahead of the holiday shopping season, especially since it’s expected to announce more computers that run on its own chips instead of Intel’s processors. Last month, Apple announced and subsequently released new iPhones, iPads and Apple Watches, leaving Macs as the remaining major product line that hasn’t been updated this fall. Apple is also likely to provide a release date for macOS Monterey, the latest version of Mac software, which was announced in June but has not yet been officially released.
— Reuters contributed to this report. Follow all the market action like a pro on CNBC Pro. Get the latest on the pandemic with CNBC’s coronavirus coverage.