Investing.com - Wall Street futures pointed to a flat open on Monday as investors remained cautious ahead of this week’s monetary policy decision from the Federal Reserve (Fed) and the monthly jobs report and kept an eye on developments in the U.S. presidential election after news that the Federal Bureau of Investigation had obtained a warrant to examine Democratic candidate Hillary Clinton’s e-mails.
The blue-chip Dow futures inched up 3 points, or 0.02%, by 7:01AM ET (11:01GMT), the S&P 500 futures edged forward 1 point, or 0.05%, while the tech-heavy Nasdaq 100 futures advanced 11 points, or 0.22%.
On Wednesday’s macro calendar, market participants will look digest personal income and spending for September along with the Fed’s preferred inflation gauge, the core PCE prince index at 8:30AM ET (13:30GMT).
The Chicago purchasing managers’ index (PMI) for October will be released at 9:45AM ET (13:45GMT) followed later in the day by readings from the Dallas Fed on manufacturing and personal consumption expenditures.
The U.S. central bank holds its next two-day monetary policy meeting on November 1 and 2 with markets currently pricing in the odds of a rate hike at just 8.3%, according to Investing.com’s Fed Rate Monitor Tool.
Analysts widely believe that the U.S. central bank will hold off on making a move this Wednesday due to the fact that the presidential elections take place shortly afterwards on November 8.
Fed fund futures currently place the probability of a move at the following meeting in December at 73.9%.
Besides the Fed decision, market participants were also waiting for the October employment report to be released on Friday.
The consensus forecast is that the data will show jobs growth of 175,000, following an increase of 156,000 in September, the unemployment rate is forecast to dip to 4.9% from 5.0%, while average hourly earnings are expected to rise 0.3% after gaining 0.2% a month earlier.
An upbeat employment report will point to an improving economy and support the case for higher interest rates in the coming months, while a weak report would add to uncertainty over the economic outlook and push prospects of tighter monetary policy further off the table.
On the company front, GE(NYSE:GE) and Baker Hughes (NYSE:BHI) confirmed an agreement to merge oil and gas operations. The Dow component will own 62.5% of the new company with shareholders of the oil services provider owning 37.5% and receiving a one-time cash dividend of $17.50 per share once the deal closes, presumable in mid-2017.
Meanwhile, investors were continuing to parse through corporate earnings. As of Friday 289 S&P 500 companies had already reported and were collectively showing an accelerated rate in both sales and earnings from last quarter.
According to FactSet, the earnings growth rate for the S&P 500 is 1.6%, which is above the year-over-year blended decline of -0.5% at the end of last week and the year-over-year estimated decline of -2.2% at the end of the third quarter.
If the index reports growth in earnings for the quarter, it will mark the first time the index has seen year-over-year growth in earnings since the first quarter of 2015 (0.5%).
Meanwhile, oil prices were lower on Monday as hopes for a deal among major oil producers to curb output began to fade.
On Friday, OPEC members failed to agree on how to put in place a global deal to limit production, following objections from Iran which has been reluctant to even freeze its output, sources said.
On Saturday, non-OPEC producers made no specific commitment on Saturday to join OPEC in limiting oil output levels to prop up prices, suggesting they wanted the oil cartel to solve its own differences first.
U.S. crude futures fell 0.47% to $48.47 by 7:02AM ET (11:02GMT), while Brent oil lost 0.45% to $50.45.
Elsewhere, eyes were focusing on central banks as the Bank of Japan kicked off its two-day meeting on Monday, with no changes expected from the policy decision due during Asian hours on Tuesday.
Ahead of the rate decision by the Bank of England (BoE) on Thursday, British news was awash with speculation over Mark Carney’s position at the helm of the U.K.’s central bank. Carney had promised to make a decision on whether he will stay on until 2021 or leave in 2018.
Lastly, euro zone inflation figures rose to the highest level since June 2014 this month, a welcome sign for the European Central Bank (ECB) that its monetary policy is gradually eliminating the threat of deflation in the region, though the 0.8% rise remains well below the 2% target, underlining expectations that monetary authority will extend the March 2017 end date for its asset purchasing program.