Sentiment Lukewarm After Mixed Overseas Factory Activity Data

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Monday, with the sentiment under-laced with caution, as overseas concerns and domestic uncertain rate and economic environment weigh. Commodities are mostly higher even as the dollar is firmer, while oil is seeing further downside.

After fairly encouraging Chinese manufacturing data catalyzed an upward move in Asia, lackluster factory activity data from the eurozone and weak manufacturing data from the U.K. and bank stress test results from Europe impacted the mood across the Atlantic. With M&A deals offering some support, the domestic markets may head to a positive open, although manufacturing activity data based on the Institute for Supply Management's national survey and the move in crude oil price could dictate terms as the session progresses.   U.S. stocks ended mixed in the week ended July 29th, as the Fed's non-committal stance and oil's retreat impacted sentiment even as some earnings, especially among tech companies lent support.    Last Monday, the major averages ended lower amid a pullback in oil prices and lackluster risk sentiment. Mixed earnings stifled risk sentiment on Tuesday, leading to a mixed close.     The lackluster performance continued on Wednesday, with the FOMC announcement failing to give a real thrust to the markets. Stocks closed mixed in the session. Mixed earnings led to another mixed close on Thursday. The averages closed mixed yet again on Friday, weighed down by mixed economic data and earnings.    For the week ended July 29th, the Dow Industrials lost 138.61 points or 0.75 percent before ending at 18,432 and the S&P 500 Index closed at 2,174, down 1.43 points or 0.07 percent, while the Nasdaq Composite ended up 61.97 points or 1.22 percent at 5,162.    Among the sectors, the NYSE Arca Gold Bugs Index rallied 5.89 percent for the week and the NYSE Arca Biotechnology Index jumped 4.40 percent. Additionally, the Philadelphia Semiconductor Index and the NYSE Arca Computer Hardware Index advanced 3.29 percent and 2.10 percent, respectively.    On the other hand, the Philadelphia Oil Service Index fell 2.05 percent and the Dow Jones Transportation Average, the Dow Jones Utility Average, the NYSE Arca Airline Index and the NYSE Arca Oil Index all lost over 1 percent.    Currency, Commodity Markets    Crude oil futures are slipping $0.57 to $41.03 a barrel after declining $2.59 or 5.86 percent to $41.60 a barrel in the week ended July 29th. The commodity was down about 14 percent for the month of July, as supply glut concerns and macroeconomic concerns exerted downward pressure on it.    Gold futures, which rose $25.60 or 1.93 percent to $1,349 an ounce in the previous week, are currently moving down $2.70 to $1,346.30 an ounce. The most actively traded December futures are declining $2.50 to $1,355 an ounce.    Among currencies, the U.S. dollar weakened against most currencies in the week ended July 29th, as the Fed stood pat, the second quarter GDP data disappointed to the downside and the yen weakened in the run up to last Friday's Bank of Japan's rate announcement. Subsequently, post the announcement, the yen clawed back some of the losses as the BoJ offering was underwhelming.      The dollar lost 3.83 percent against the yen before ending last week at 102.06 yen, and it fell 1.79 percent against the euro to $1.1174 a euro.    The U.S. dollar is currently trading at 102.45 yen and is valued at $1.1167 a euro.    Asia    Most Asian markets advanced, encouraged by a positive private Chinese manufacturing reading. The Indonesian market led the gains in the region and the Hong Kong and Taiwanese markets also rose strongly, while the Chinese market fell notably.     The Japanese market advanced, with a drop by the yen supporting sentiment. The Nikkei 225 Index opened lower but trimmed its loss over the course of the morning. After nervously hugging the unchanged line till early afternoon trading, the index saw a short spike. Subsequently, the index held mostly above the unchanged line before ending up 66.50 points or 0.40 percent at 16,636, rising for the second straight session.    Retail, real estate, telecom, insurance, banks and pharma stocks gained ground, but utility, brokerage, most export, resource, chemical, food and housing stocks came under selling pressure.    Australia's All Ordinaries Index hovered in positive territory throughout the session before ending up 26.10 points or 0.46 percent at a 1-year high of 5,670, marking the sixth straight session of gains. Energy, material and real estate stocks led the gain, while telecom, healthcare and consumer discretionary stocks moved to the downside.    Hong Kong's Hang Seng Index ended at 22,129, up 237.77 points or 1.08 percent, while China's Shanghai Composite Index closed 25.95 points or 0.87 percent lower at 2,953.    On the economic front, data released by Caixin and Markit showed that their manufacturing PMI for China rose to 50.6 in July from 48.6 in June, with the sector expanding for the first time since February 2015. Economists had expected a more modest improvement to 48.9.    However, the official manufacturing PMI released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing fell to 49.9 in July from 50 in June, while economists expected an unchanged reading. The non-manufacturing PMI edged up 0.2 points to 53.9.    Meanwhile, the results of the final survey by the Nikkei and Markit confirmed that the manufacturing sector in Japan continued to contract in July, although at a slower pace. The manufacturing sector in Australia saw acceleration in activity, according to the survey by the Australian Industry Group.    A survey by TD Securities showed that inflation expectations in Australia eased to 1 percent year-over-year in July from 1.5 percent in June. The monthly inflation rate is also expected to decelerate to 0.3 percent from 0.6 percent.    New home sales in Australia increased markedly in June after falling in the two previous months, the Housing Industry Association said. Total home sales surged a seasonally adjusted 8.2 percent over the month, reversing a 4.4 percent decline in May.   Europe    After a solid start, European stocks gave up some of their gains, as the PMI data began to come in. The bank space is seeing volatility, as traders digest the results of the European bank stress test results.  The major averages in the region are currently lower.   In major corporate news, Heineken reported higher profits and revenues for its first-half but warned of weakness in developing markets and currency headwinds.     Air Liquide reported a drop in first-half profits, weighed down by costs associated with its acquisition of Airgas. However, the company said its full year results will be buoyed by the purchase.    On the economic front, final data released by Markit showed that eurozone manufacturing activity grew at a slower pace in July, but the pace of expansion was faster than the initial estimate. The factory sector PMI fell to 52.0 in July from a 6-month high of 52.8 in June. The flash reading for July was 51.9.   Meanwhile, Markit and the Chartered Institute of Procurement and Supply reported that the U.K. manufacturing sector contracted much faster than initially estimated in July. The corresponding PMI fell to 48.2 from 52.4 in June, while the flash estimate had pitched the reading at 49.1.    U.S. Economic Reports    Private sector activity, consumer and job market readings are among the key economic data of the unfolding week.     The markets are likely to closely track the Labor Department's non-farm payrolls report for July due on Friday, the ADP's private sector employment report for July released ahead of the NFP report, the results of the Institute for Supply Management's manufacturing and non-manufacturing surveys, due on Monday and Wednesday, respectively, the Commerce Department's personal income and spending report for June scheduled to be released on Tuesday and the routinely scheduled jobless claims report.    Marit's final U.S. manufacturing and non-manufacturing PMIs for July, the Commerce Department's construction spending and trade balance reports, both for June, some Fed speeches, the Federal Reserve's consumer credit report for June and announcements concerning next week's Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events of the week.    Markit is set to release its final U.S. manufacturing PMI for July at 9:45 am ET. In June, the index was at 51.3.    At 10 am ET, the Institute for Supply Management is scheduled to release its manufacturing PMI for July. Economists expect the index to remain unchanged at 53.2.    In June, the manufacturing sector expanded at an accelerated pace, with the corresponding PMI coming in at 53.2 compared to 51.3 in May. Economists expected the index to have improved to a more modest 51.5. The new orders index rose 1.3 points to 57, the best reading since March. Export orders also improved.     The Commerce Department is due to release its construction spending report for June at 10 am ET. The consensus estimate calls for a 0.6 percent month-over-month increase in construction spending for the month.    Construction spending fell 0.8 percent month-over-month in May, belying expectations for a 0.6 percent increase. April's reading was downwardly revised to show a 2 percent drop compared to the 1.8 percent drop estimated initially.     Stocks in Focus 

Verizon (VZ) and Fleetmatics (FLTX) announced they have entered into a definitive agreement under which Verizon will acquire Fleetmatics, a global provider of fleet and mobile workforce management solutions, for $60.00 per share in cash.

 Tesla (TSLA) and SolarCity (SCTY) have agreed to merge, with SolarCity surviving the Merger as a wholly owned subsidiary of Tesla.    Sanofi (SNY) announced that the European Medicines Agency has accepted for review the Marketing Authorization Application for sarilumab, an investigational monoclonal antibody meant to treat adult patients with rheumatoid arthritis.     Wells Fargo (WFC) announced the completion of its purchases of General Electric (GE) unit GE Capital's commercial distribution finance in Australia and New Zealand.    Shire (SHPG) recommended that its shareholders reject an unsolicited mini-tender offer made by TRC Capital to buy 1 million ADS of the company, each representing 3 ordinary shares of Shire, at $182.75 per ADS in cash.     Amkor (AMKR), General Growth (GGP), Post Properties (PPS), Tenet Healthcare (THC), Vornado Realty (VNO), Trex (TREX) and Williams Companies (WMB) are among the companies due to release their quarterly results after the close of trading.