US stocks are seen heading lower at open today on weak global economic data. There is also growing concern Washington is heading for another budget impasse that could lead to another government shutdown.
CMC Markets says futures late morning were pointing to Dow opening 54 points lower at 17,904, with the S&P 500 off six points to 2,069. The tech-heavy Nasdaq is seen kicking off 15 points lower at 4,296.
On Friday, Dow rose higher and peaked a whisker away from 18,000 thanks to the strongest jobs report since 2012. But momentum is fading this morning on weak overnight data out of China and Japan that dampens global growth prospects.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
But Lawler notes that, interestingly, the Dow's exuberance on Friday over the jobs report was not wholly shared by the S&P 500 as the index formed a new all-time high, but could not sustain it for long.
He says: "The double-edge nature of too-hot economic data was felt more strongly on the broader [S&P 500] index: confidence in the economy brought on doubts about the timing of the first rate-hike from the Fed.
"Generally though, more jobs, higher wages and lower prices at the pump bode well for the US consumer heading into the holiday shopping season. For this reason, US retail sales later this week will be closely eyed. They could have benefitted from Black Friday and record auto sales."
Lawler also notes that investors are beginning to fret over Washington's ability to find consensus to pass a key spending bill by this Thursday.
If an agreement cannot be reached there could be a re-run of the government shutdown experienced last year that brought markets to their knees in 2013.
The Washington Post thinks it is unlikely to happen, but then few believed a similar impasse last time around would be allowed to become so serious as to force the shutdown.
President Barack Obama's recent executive action on immigration has angered many in the Republican Party, and they are looking to get their own back, perhaps even force Obama to reverse on the actions. They see the spending bill as an ideal bargaining chip and opportunity to voice their anger.
On the corporate front, pharmaceutical giant Merck and Cubist Pharmaceuticals will be in sharp focus on reports that Merck is in talks to buy the antibiotics firm.Bloomberg, citing a source familiar with the talks, reports that Merck would pay about $100 a share, and that the deal could be announced as early as this week,
An offer in that range would represent a 34% premium over Cubist's closing share price last Friday, 5 December.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Kam is a former deputy editor at Hemscott Invest and online editor, City A.M and he was also previously the Digital Editor at IFA Magazine. Kam is currently a senior journalist at The Global Treasurer and contributes to MoneyWeek. Kam shares expertise on the FTSE 100, investing and global stocks.
Review: Trisara, Phuket – a feast for the senses in Thailand
Expecting an inheritance? Don’t – only a fifth of Boomers plan to part with their cash
